EPA’s Wheeler signs rule to replace Clean Power Plan

Environmental Protection Agency Administrator Andrew Wheeler on June 19 signed the final Affordable Clean Energy (ACE) Rule, which will replace the Clean Power Plan.

The ACE Rule aims to reduce carbon dioxide emissions by focusing on heat rate improvements that can be applied to individual coal-fired generating units. ACE provides a list of “candidate technologies” for states to select that can be used to establish unit specific performance standards states can incorporate into their compliance plans.

In a news release, the EPA said that the ACE Rule will reduce emissions of CO2, mercury, as well as precursors for pollutants like fine particulate matter and ground-level ozone.

The agency said that in 2030, the ACE rule is projected to:

  • Reduce CO2 emissions by 11 million short tons
  • Reduce SO2 emissions by 5,700 tons
  • Reduce NOx emissions by 7,100 tons
  • Reduce PM2.5 emissions by 400 tons
  • Reduce mercury emissions by 59 pounds

EPA projects that ACE will result in annual net benefits of $120 million to $730 million, including costs, domestic climate benefits, and health co-benefits.

“With ACE, along with additional expected emissions reductions based on long-term industry trends, we expect to see CO2 emissions from the electric sector fall by as much as 35% below 2005 levels in 2030,” the EPA said.

Association comments on ACE Rule

The American Public Power Association on June 20 said it welcomed the EPA’s final ACE Rule. It allows states to drive carbon dioxide reductions by improving the efficiency of power plants, as contemplated by Section 111(d) of the Clean Air Act.

“The final ACE rule provides a framework for states to tailor their emission reduction plans based on local market conditions and established emission policies. The rule gives states the flexibility to regulate emissions at the individual power plant level while considering factors such as a plant’s remaining useful life,” the Association said.

Public power utilities have reduced CO2 emissions by 33 percent between 2005 and 2017 by investing in low and non-emitting generation from solar, wind, hydro, nuclear, and natural gas, the Association said, noting that public power continues to reduce emissions through local, state, and regional programs.

Clean Power Plan

The Clean Power Plan sought to implement a broad interpretation of the best system of emission reduction to CO2 emissions. Under that system, a state could have created a plan to reduce aggregate emissions, by joining a multi-state emissions reduction scheme, for instance.

Critics of the Clean Power Plan said that such a system wide or industry wide approach was an overly broad interpretation of Section 111(d) of the Clean Air Act.

A group of states and industry associations, led by West Virginia, filed a lawsuit to halt the implementation of the plan, arguing that it violated their rights to regulate the electric power industry.

The Clean Power Plan was put on hold by the Supreme Court in 2016 and states did not have to implement the rule. Subsequently, EPA continued to inform the court of its plans as the agency conducted its evaluation as to whether the CPP and new source performance standards should be revised or repealed.

In his campaign, then-presidential candidate Donald Trump several times pledged to repeal the Clean Power Plan. Under the Trump administration the EPA is now finalizing its repeal of the Clean Power Plan and replacing the rule with the Affordable Clean Energy rule which is in keeping with EPA’s new interpretation that unit efficiency improvements is the only permissible reading of CAA section 111(a)(1).  

“Unlike the Clean Power Plan, ACE adheres to the Clean Air Act and gives states the regulatory certainty they need to continue to reduce emissions and provide a dependable, diverse supply of electricity that all Americans can afford,” Wheeler said in a statement.

EPA’s final ACE rule does not include changes to the new source review program whose permitting requirements begin when a power plant or other facility is rebuilt or modified and results in a significant increase in emissions of air pollutants.

The utilities have viewed NSR as a barrier to plant owners and operators making efficiency improvements. Instead of finalizing the NSR reforms in ACE, EPA plans to issue a future rulemaking.

Association commented on proposed ACE Rule in October

The EPA last summer proposed to replace the CPP with the ACE Rule and the American Public Power Association subsequently filed comments on the proposed ACE Rule in October of last year.

Legal challenges

On the same day that Wheeler signed the ACE Rule, several parties said that they intended to file legal challenges to the rule including the Natural Resources Defense Council and New York Attorney General Letitia James.

The new rule will take effect 30 days after it is published in the Federal Register. States would then have three years to submit a compliance plan.