EPA proposal would replace Clean Power Plan

The Environmental Protection Agency is proposing to replace the Clean Power Plan with a new rule that would let states decide how to make existing coal-fired power plants more efficient to lower their greenhouse gas emissions.

Today’s proposal provides the states and regulated community the certainty they need to continue environmental progress while fulfilling President Trump’s goal of energy dominance,” Andrew Wheeler, the EPA’s acting administrator, said Tuesday.

The Obama administration’s Clean Power Plan exceeded the EPA’s legal authority and would in some areas lead to double digit rate hikes, Wheeler said during a conference call with reporters.

The Clean Power Plan aimed to cut greenhouse gas emissions from the U.S. power plant fleet by 32% below 2005 levels by 2030. The plan, which was stayed by the U.S. Supreme Court while litigation was ongoing, would have required states to meet emissions reduction targets using various options such as energy efficiency, renewable resources, and carbon dioxide trading programs.

The EPA contends its proposed rule will roughly lower greenhouse gas emissions as much as the Clean Power Plan would have, partly because the power sector has been shifting away from coal-fired generation towards low and non-emitting generation resources since the Clean Power Plan was drafted, according to Bill Wehrum, EPA assistant administrator for the Office of Air and Radiation.

The EPA is proposing that heat rate improvement measures are the “best system of emission reduction” (BSER) for the roughly 600 existing coal-fired units that will be affected by the rule.

“EPA believes that a BSER focused on making these plants as efficient as possible is the best way to ensure GHG emission reductions regardless of other factors such as technology changes for other types of generation, changes in fuel price, changes in electricity demand, or changes in energy policy that neither environmental regulators nor power companies have the power to control,” the agency said in the draft rule.

Under the proposed Affordable Clean Energy rule, states will have three years to require heat rate improvement measures for individual power plants using guidelines issued by the agency. The EPA would then have a year to act on the state plans.

The proposed heat rate improvement guidelines are a set of technologies and operations and maintenance practices. They include neural networks, intelligent sootblowers, boiler feed pumps, air heater and duct leakage control, variable frequency drives, blade path upgrades, redesign or replacement of economizers, improved steam surface condenser cleaning, and staff training.

The EPA decided not to include switching a coal-fired unit to natural gas as a BSER option because it would fundamentally redefine the source,” the agency said in the proposed rule. 

The EPA’s proposal would allow states to set performance standards, based on a power plant’s age, location, and design.

The EPA is also proposing an hourly “preliminary applicability test” that would allow operators to make changes to coal-fired units without triggering New Source Review permitting requirements.

“This change will allow states, in establishing standards of performance, to consider [heat rate improvements] that would otherwise not be cost-effective due to the burdens incurred from triggering NSR,” the EPA said.

The Natural Resources Defense Council panned the EPA’s proposal. “To prop up failing coal-fired power plants, the proposal sets paltry pollution limits based on minimal ‘tune-ups’ at those power plants and then authorizes states to weaken the standards even further — or even eliminate them altogether,” Lissa Lynch, an NRDC attorney, said. “On top of that, the proposal would create new loopholes by gutting New Source Review permitting requirements, enabling power plants to increase their emissions.”

The American Public Power Association, on the other hand, said the proposed plan respects the legal limits of the Clean Air Act while comporting with prior Supreme Court precedent on CO2 and gives states needed flexibility when it comes to setting performance standards for electric generating units.

Additionally, the rule provides a framework that recognizes each state’s unique conditions and avoids interfering with established state energy policies.

“We look forward to participating in EPA’s rulemaking to finalize its proposal so that our members — community-owned, not-for-profit electric utilities — can make long-term planning decisions and investments to best serve their customers with reliable, affordable, and environmentally responsible power,” said Sue Kelly, president and CEO of the Association.

The EPA estimates replacing the Clean Power Plan could save $400 million a year.

The EPA said replacing the Clean Power Plan could ease grid reliability issues that are driven by trends in the industry.

“This shift is creating tremendous strain on the power infrastructure even without the added pressures of an EPA mandate to further shift away from additional coal-fired generation,” the EPA said.

The EPA said it will take comments on the proposal for 60 days after it is published in the Federal Register.

The proposed rule will likely face court challenges.