Yesterday, the U.S. Environmental Protection Agency (EPA) proposed a new rule to reduce greenhouse gas (GHG) emissions from existing coal-fired electric utility generating units and power plants across the country.
This proposal, entitled the Affordable Clean Energy (ACE) Rule, establishes emission guidelines for states to use when developing plans to limit GHGs at their power plants. The ACE Rule replaced the prior administration’s overly prescriptive and burdensome Clean Power Plan (CPP) and instead empowers states, promotes energy independence, and facilitates economic growth and job creation.
The proposal will work to reduce GHG emissions through four main actions:
- ACE defines the “best system of emission reduction” (BSER) for existing power plants as on-site, heat-rate efficiency improvements;
- ACE provides states with a list of “candidate technologies” that can be used to establish standards of performance and be incorporated into their state plans;
- ACE updates the New Source Review (NSR) permitting program to further encourage efficiency improvements at existing power plants; and
- ACE aligns regulations under CAA section 111(d) to give states adequate time and flexibility to develop their state plans.
EPA’s regulatory impact analysis (RIA) for this proposal includes a variety of scenarios. These scenarios are illustrative because the statute gives states the flexibility needed to consider unit-specific factors – including a particular unit’s remaining useful life – when it comes to standards of performance. Key findings include the following:
- EPA projects that replacing the CPP with the proposal could provide $400 million in annual net benefits;
- The ACE Rule would reduce the compliance burden by up to $400 million per year when compared to CPP; and
- EPA estimates that the ACE Rule could reduce 2030 CO2 emissions by up to 1.5% from projected levels without the CPP – the equivalent of taking 5.3 million cars off the road. Further, these illustrative scenarios suggest that when states have fully implemented the proposal, U.S. power sector CO2 emissions could be 33% to 34% below 2005 levels, higher than the projected CO2 emissions reductions from the CPP.