An Environmental Protection Agency (EPA) rule proposed June 2 seeks to reduce greenhouse gas (GHG) emissions from fossil-fuel fired power plants by 30 percent from 2005 levels by 2030. This aggressive agenda could considerably alter the face of the power industry, adding more renewable options and theoretically dialing down the United States’ dependence on higher-carbon fuel sources. However, according to Bicky Corman, partner at Venable LLP and former EPA deputy general counsel and senior sustainability advisor to the administrator, the rules are far from final.
“In order for this country to be able to achieve the ambitious and aggressive target of 30 percent GHG reduction set forth in the proposed rule, EPA and the states will have to broadly interpret statutory and regulatory language prescribing the components of a performance standard,” Corman says. “EPA’s proposed rule language makes clear that EPA is striving to allow the utmost flexibility, in which the states, the power plants, and all the other entities involved in generating, distributing and using electricity, are integral to determining greenhouse gas emissions limits, and to formulating the strategies to achieve those limits.”
That being said, the final figures in the proposal could change dramatically between now and implementation. Once the proposal has been published in the Federal Register, interested parties will have 120 days to comment on it. Perhaps a testament to how invested stakeholders are already is the fact that EPA increased the time period for comment from the standard 60 days in response to stakeholder requests.
In addition to receiving written comments, the EPA will also hold public hearings at the end of July in Atlanta, Ga., Denver, Co., Pittsburgh, Pa., and Washington, DC to further discuss the implications of the proposed rules. Once the rule is final, states will have one year to submit their own individual plans for reducing the amount of GHGs prescribed by the final rule or use a two-step process to extend the deadline if they need more time to enact state laws or rules or coordinate with other entities.
“One of the novel aspects of the proposed rule is that instead of establishing a greenhouse gas limit that is specific to a particular power plant, the proposal sets forth state-wide, and state-specific, greenhouse gas reduction targets. Those proposed targets are set based upon the state’s particular energy mix, meaning how much of its electricity comes from coal, from natural gas, or from nuclear. The proposed targets also build on the steps many states have already taken to lower their carbon emissions, including their existing renewable portfolio goals, their efforts to reduce consumer demand for electricity, and their participation in multi-state, market-based, GHG reduction programs,” Corman says.
While the proposed rule will have a considerable period during which it may be subject to probing from stakeholders, Congress and the courts, it has already been met with some pushback, including charges that it will cost U.S. Citizens billions of dollars each year. In response, the rule’s supporters contend that the costs associated with those concerns have received considerable analysis as part of the proposal. Bloomberg reports that, “The EPA anticipates the proposed rules would produce net climate and health benefits of between $48 billion and $82 billion at a cost of between $5.4 billion and $8.8 billion to the power industry in 2030.”
The proposed rule evaluates benefits that come from what are expected to be both cheaper energy bills for consumers, as well as projected climate and public health benefits, for example, by avoiding premature deaths and childhood asthma attacks, and missed school days, or work days for parents. The preamble notes that while the proposed rule may induce additional spending in some areas, it is expected it will also create tens of thousands of new jobs in the power-generating and energy-efficiency sectors.
Again, nothing is set in stone, and whether the rule draft changes as a result of the commenting period or because of lawsuit, there will be plenty of opportunities for its course to be altered. “The ensuing discussion will pose unique opportunities to see if EPA rules can indeed advance holistic/systemic solutions that are good for the environment, good for business, and good for communities,” Corman added.
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