The Environmental Protection Agency (EPA) continues to develop its first greenhouse gas performance standards for new and existing power plants under the Clean Air Act. These new GHG standards could increase opportunities for both supply- and demand-side advanced energy technologies to the tune of hundreds of billions of dollars, depending on the ultimate regulatory design. This is the latest in a regular series of blog posts chronicling important news about these EPA regulations and their development.
Federal News
EPA may have tipped its hand about the role of “outside the fence line” measures in its upcoming power plant rules. The President’s 2015 budget proposal includes $24.3 million for state 111(d) implementation assistance, an amount that would not be needed for imposing only smokestack-type standards. “If EPA were expecting the states simply to do what we call ‘inside the fence line’ things to reduce the emissions rate, then there would be no reason to have all those resources,” former EPA air chief Jeff Holmstead told Greenwire. But states will need more technical assistance from EPA if implementation plans involve measures like demand response and energy efficiency. EPA Administrator Gina McCarthy will be on the Hill this week defending the president’s budget proposal - which includes nearly $200 million for the Climate Action Plan overall - at separate Senate and House hearings Wednesday and Thursday, respectively.
In another revealing statement about the upcoming rules, McCarthy indicated her policy preference for state-based emission rates rather than carbon caps or “budgets” because, she said, “I’m recognizing that [some states have] expanded energy needs…we are not arbitrarily picking a number that everybody needs to meet. We’re looking at individual states.”
State News
The Kentucky legislature sent a bill to Governor Beshear’s desk this week that would limit the implementation of EPA’s upcoming power plant emission limits. Sponsored by Rep. Jim Gooch, who has private interests in coal-related businesses, and endorsed by coal industry groups and local chambers of commerce, HB 388 prohibits Kentucky’s state implementation plan from blocking coal as a fuel source or from forcing power plants to utilize CCS technology. The Kentucky House of Representatives also sent to the Senate a bill to allow coal mining and processing operations to apply to the state for tax incentives for job creation and investment, in response to a downturn in the state’s Appalachian coal fields.
A recent poll found that a decisive majority of voters support greenhouse gas emission standards for existing power plants. The poll, commissioned by the National Resources Defense Council, found that voters are also more likely to vote for candidates who support EPA limits on carbon pollution. Even among Republican voters, there was a 53% majority who favored carbon standards. An even wider margin was present among likely voters of both parties in “red states.”
Other News
Harvard Law School released a paper making the case for energy efficiency programs under the Section 111(d) Rule for Existing Power Plants. Citing several precedents for beyond-the-fence-line emission reductions in previous 111(d) rules, the paper argues that end-use energy efficiency should be considered part of the “best system of emission reduction” EPA must identify for greenhouse gases from existing power plants.
PJM Interconnect, the nation’s largest grid operator, which manages the power system for 13 states in the Mid-Atlantic and Midwest, recently completed a study that suggests it could handle 30 percent generation from renewable sources like wind and solar with no effect on reliability.