What’s New and Noteworthy in the Clean Power Plan?

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Cross posted from Sierra Club’s Compass Blog.

Andres Restrepo and Joanne Spalding

**Note:** This blog post is part of a series geared toward discussing the wide ranging impacts of the President’s Clean Power Plan. Over the course of this week, Sierra Club experts will add to this series with posts on what’s new in this plan and its effects on coal, environmental justice, labor, policy, clean energy, and international climate negotiations.

EPA first released the draft Clean Power Plan in June 2014 and over the course of the fourteen months that followed, the agency engaged in an extensive process of public outreach. It collecting over 4.3 million comments on all aspects of the proposal and hosting hundreds of in-person meetings with stakeholders. The agency incorporated much of the feedback it received during this process into the final standard, which reflects substantial changes from the proposal.

Below, we discuss major changes in the final plan that we believe improve the policy’s effectiveness and will help the United States move away from dirty fossil fuels while transitioning to a clean energy economy.

  • Renewable energy (RE). In the draft guidelines, EPA based its emission reduction goals partly on the availability of renewable energy, such as wind and solar, to replace fossil fuel-fired power plants. However, the proposal greatly underestimated the nation’s capacity to build out RE generation and did not properly account for the dramatic growth in renewable capacity. The final guidelines greatly increase their projections of RE build-out with a new methodology based on recent growth patterns. Overall, the EPA estimates that the final plan will result in at least 540,000 MWh of new renewable generation by 2030, compared to the proposal’s estimates of 305,000-335,000 MWh.

  • Source-based standards. It is critical that any carbon standard for power plants achieve emission reductions from the pollution sources themselves—that is, from individual coal and gas plants. The proposed Clean Power Plan established statewide rather than source-specific goals tied to each state’s fleet of fossil fuel-fired plants. The final plan takes a different tack, and creates two source-specific standards as its primary targets: a maximum CO2 emission rate for coal plants and another rate for gas plants. States can also choose other options in their implementation plans, however, including a blended rate for coal and gas plants together, a state-specific cap on total CO2 emissions from existing plants, and a CO2 cap that covers both new and existing sources. The final guidelines retain the proposal’s flexibility, but place a new focus on source-specific emission reduction goals.

  • Federal enforceability. The draft Clean Power Plan would have allowed states to hold entities other than the regulated power plants (such as energy efficiency companies) legally responsible for achieving some of its emission reduction goals. While those entities would have been subject to enforcement actions in federal court if they fell short, there would have been no recourse against the regulated fossil plants for failure to achieve those emissions reductions. By contrast, the final guidelines ensure that regulated plants will carry the full legal burden of reducing their own CO2 emissions. States may still impose state-level obligations on entities other than power plants, but regulated power plants will bear ultimate legal responsibility if the state falls short of its emission reduction targets.

  • Distributed generation (“DG”). Distributed renewable resources are those that generate electricity at or near the place that the electricity will be consumed, such as rooftop solar panels. These resources offer a huge opportunity to reduce electric sector CO2 emissions while lowering consumers’ electric bills. With rapidly declining costs, DG resources are expected to grow exponentially over the next decade. EPA’s proposal did not account for DG in its emission reduction targets and made little to no mention of DG as a potential compliance mechanism. While the final guidelines still do not account for DG in their emission reduction targets, they highlight the benefits of DG as a compliance tool, noting that “cost-effective opportunities for distributed generation alone could satisfy one-third to over one-half of the stringency associated with building block 3” (the renewable energy building block, which is one of three building blocks EPA used to set carbon reduction targets and create options for compliance).

  • Decreased reliance on natural gas. The proposed Clean Power Plan expected states to achieve a heavy proportion of the required emission reductions by replacing large amounts of coal with natural gas. Yet gas-fired electricity still emits large quantities of CO2, in contrast to renewable resources which emit no CO2. In addition, the process of extracting natural gas from the ground produces climate-disrupting methane leaks and degrades landscapes and water quality through dangerous hydrofracking methods. Compared to the proposal, the final guidelines rely much more heavily on investment in new renewables rather than gas (as noted above), and now expect gas-fired generation to increase no more than would have occurred anyway under a business-as-usual scenario.

  • Regional focus. Our nation’s electric sector is structured as a network of large, interconnected grids that span many states and link generation resources across broad regions of the country. Therefore, it makes the most sense to calculate the potential for emission reductions in light of the regional electric grids, rather than the approach that EPA took in its draft standard, where it calculated EPA reduction targets on a purely state-by-state level.  The final plan takes a regional approach for all of the building blocks, a change that reflects how the electric sector actually functions much better than the original proposal’s state-by-state model.

  • Environmental and economic justice. Environmental justice, or EJ, focuses on the ways in which environmental harms disproportionately affect people of color, low-income, and indigenous communities. Unlike the proposal, which barely touched on EJ issues, EPA’s final Clean Power Plan addresses these topics in depth. First, the final guidelines now analyze the physical proximity of the nation’s coal and gas plants to EJ communities. Second, the guidelines require states to ensure meaningful participation from communities and encourage them to perform EJ analyses of their plans. Third, EPA has proposed a voluntary program to spur investment in low-income energy efficiency projects prior to the rule’s compliance period.  The final guidelines also explore federal programs to assist workers in communities heavily dependent on the coal industry that may be affected by the transition away from coal toward cleaner electricity resources.

Read more about the environmental justice components of the Clean Power Plan in English and Spanish, and more about the economic justice elements inEnglish and Spanish, in their respective links.

  • Nuclear power. EPA’s proposed guidelines included a mechanism that encouraged aging nuclear power plants to remain online beyond their expected retirement dates and seek renewed operating licenses. Yet the costs and environmental risks of nuclear power are too great to justify when renewable resources like wind and solar offer a safe and clean pathway toward climate stabilization. EPA changed course in the final plan and removed any incentive for old nuclear units to remain in operation longer than necessary.

With all these changes and improvements, the Clean Power Plan creates an exciting opportunity for states to chart a course to renewable energy, and for all Americans to get engaged in creating a safe, prosperous clean energy future. The Sierra Club and our allies will be working hard in the coming months to defend the standard and push states to write and implement strong plans. Join us!

Sierra Club Clean Power Plan Blog Series

  • Policy Impacts Blog Post (Coming Soon)

  • Clean Energy Impacts Blog Post (Coming Soon)

  • International Impacts Blog Post (Coming Soon)

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