GM 14-051

EPA Publishes "Clean Power Plan" Proposed Rule; Public Hearings Scheduled

On June 2, 2014, the Environmental Protection Agency (EPA) issued a proposed rule pursuant to the Clean Air Act to establish emission guidelines for carbon pollution from existing electric generating units. EPA refers to this proposed rule as the “Clean Power Plan.” It was published in the FEDERAL REGISTER on June 18, 2014 (79 Fed. Reg. 34829). The deadline for submitting comments is October 16, 2014. Three public hearings have been scheduled: Atlanta – July 29 and 30; Washington, DC – July 29 and 30; and Pittsburgh – July 31 and August 1. The proposed rule would not apply to the four existing electric generating units on Indian reservations although separate rules would be established; the EPA requests comments on this and other Indian Country-specific matters.

The proposed rule is available on an EPA website at While the regulatory text of the proposed rule takes up approximately eight pages in the FEDERAL REGISTER, the explanatory “preamble” is 120 pages long. In addition, a great deal of supplementary information is available on the EPA website.

The proposed rule is a major component of President Obama’s Climate Action Plan, which was released in June 2013. Carbon dioxide (CO2) accounts for 82 percent of greenhouse gas (GHG) emissions in the United States, and fossil-fuel power plants account for about one-third of the CO2 emissions. The Clean Power Plan is designed to reduce CO2 emissions from power plants in the range of 30 percent below 2005 levels by 2030. EPA projects that these CO2 emissions reductions would result in net climate and health benefits in the range of $48 billion to $82 billion, and more than 100,000 net new jobs. We note that the House Appropriations Subcommittee on Interior and Related Agencies has released an appropriations bill for FY 2015 that would prohibit EPA from moving forward with the rulemaking process for the Clean Power Plan. The House Subcommittee proposal is strongly opposed by many Democrats in Congress and by the Administration.

The basic approach of the Clean Power Plan for reducing CO2 emissions is to require each state in which there are covered electric generating units (EGUs) to adopt a state plan. This is similar to, though somewhat different from, the approach taken in the Clean Air Act to control other kinds of pollutants. Most air pollutants are regulated under section 110 of the Clean Air Act, which requires each state to adopt a state implementation plan (SIP) designed to ensure that criteria established in the National Ambient Air Quality Standards (NAAQS) are met for each pollutant within a given area. The Clean Power Plan rule is based on section 111(d) of the Clean Air Act, under which EPA can establish standards of performance for categories of sources of air pollution. When EPA determines the “best system of emission reduction” (BSER) that has been adequately demonstrated for a source category, then each state must adopt a plan to achieve the specified level of emissions performance within a specified timeframe. Under the Clean Power Plan rule, states can choose to develop multi-state plans. If a state does not adopt a plan, EPA will adopt a federal plan. In making its proposed determination of the BSER, EPA recognizes that there are, in essence, two basic approaches for reducing GHG emissions from EGUs: (1) reducing the carbon intensity of covered EGUs, generally by improving their efficiency; and (2) reducing the amount of carbon emitted from covered EGUs by using them less, such as by meeting demand for electric power in other ways. For the purpose of expressing the BSER as an emission limitation, and for the purpose of setting state-level goals, the proposed rule breaks these two basic approaches down further into four main categories of measures that it calls “building blocks.” These building blocks are briefly described in the Fact Sheet “National Framework for States” and in detail in the preamble to the proposed rule at 79 Fed. Reg. 34836-38, 34858-78. The building blocks are:

1. Make fossil fuel plants more efficient.
2. Use low emitting sources more (e.g., replace coal-fired plants with natural gas combined cycle plants).
3. Use more zero- and low-emitting power sources (e.g., expand use of solar, wind, and new nuclear).
4. Use electricity more efficiently (e.g., reduce the demand for electricity though a wide range of energy efficiency measures).

Indian Country-Specific Issues. The proposed rule does not apply to existing fossil-fuel power plants located on Indian reservations. 79 Fed. Reg. 34854-55. EPA is aware of four such EGUs on three reservations, and the Agency says that it plans to establish performance goals for those plants in the future, which may be addressed either through tribal or federal plans. EPA specifically invites comments on how the best system of emission reduction should be applied to EGUs in Indian Country.

EPA also particularly invites comment on “data sources for setting renewable energy and demand-side energy efficiency targets” for Indian Country. This invitation raises an important issue – the proposed rule is one of the key regulatory measures for driving a transition in the American economy away from fossil fuels and toward energy efficiency and renewable energy. The discussion of the four building blocks indicates that the state plans will make use of existing programs that are designed for and administered by state and local governments, and most of those programs do not include tribal governments. See 79 Fed. Reg. 34928 (citing number of web-based resources). Unless such resources are also designed for use by tribal governments, Indian Country may not share in the projected benefits of reducing fossil fuel consumption by implementing energy efficiency and renewable energy. The preamble suggests that EPA would be receptive to comments on this issue.

Please let us know if we may provide additional information regarding the Clean Power Plan rule or related matters.