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Clean Power Act means changes for power plant compliance

The EPA conducted hearings on the carbon pollution standards for the U.S.’s 1500 power plants

The Environmental Protection Agency is carrying out part of President Obama’s Climate Action Plan, having held hearings in four cities on the proposed carbon pollution standards for the U.S.’s 1500 power plants. This is not a new issue for citizens in the surrounding areas of those power plants; many of them have been vocally concerned with the need for action inside the power plant businesses that are negatively impacting their regions. 

The EPA held public hearings for the proposed Clean Power Plan in Atlanta, Denver, Pittsburgh and Washington, D.C. where stakeholders both for and against hosted events alongside the hearings. The EPA has received almost 30,000 written comments on the proposal, which will have significant implications for power plants.

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Maureen Gorsen, an attorney with Alston & Bird has detailed some of the important changes the Clean Power Act will have on the emissions industry: 

“For the first time ever, power plants will be subject to regulatory controls on their carbon emissions.  In this plan, EPA is setting baselines and goals for each state to reduce their C02 emissions.  Once adopted, each state will develop plans and implementing regulations to achieve those goals in each state.”

 

This project is in a part of President Obama’s Climate Action Plan, announced in June 2013. At the announcement of that plan, Obama said: “The question is whether we will have the courage to act before it’s too late.  And how we answer will have a profound impact on the world we leave behind not just to you, but to your children and to your grandchildren.  As a President, as a father, and as an American, I am here to say we need to act.” 

Of course, this Act will have compliance requirements for businesses and change the way firms operate in order to stay compliant. Gorsen says:

“Once implementation commences, the Plan will likely cause earlier and costly expenditures in equipment and plant process changes (e.g., upgrades to boilers, steam turbines, control systems), may reduce revenues from decreased demand for energy from efficiency and demand-management measures, and will result in changes in fuel markets and prices as plants engage in fuel-switching to lower carbon fuels such as natural gas, renewables and nuclear power – and away from coal.”

The implications are more serious for some states that are dependent on coal power plants such as South Carolina, Arkansas, and Louisiana. But Gorsen notes that some states will benefit more than feel restricted by the Act — especially ones that have already jumped the gun in terms of carbon reduction and smart grid activity, i.e. California.

Gorsen warns that companies should participate in the EPA rule making in order to make sure that they are on the same page as state goals, and she says that companies should look to the future of restructuring certain plans:

“Companies should anticipating needing to develop plans to retire or retrofit plants or facilities, and to develop implementation plans so that if and when the obligation comes, the can do it in the most economical way possible.   Large energy users, such as manufacturers, data centers should do same to be able to weather any price hikes in energy.”

Contributing Author

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Juliana Kenny

Juliana Kenny is a contributor to InsideCounsel.com, covering a range of topics including patent litigation, conflict mineral laws, executive compensation, and antitrust regulation. Juliana earned B.A.s...

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