The Trump Administration’s “Affordable Clean Energy” Proposal to Replace the Clean Power Plan

Summary of the Trump Administration’s “Affordable Clean Energy” Proposal to Replace the Clean Power Plan

by Janet McCabe

On August 21, 2018, the U.S. EPA issued the proposed “Affordable Clean Energy” rule (ACE) to replace the 2015 Clean Power Plan (CPP).  ACE substantially weakens requirements for coal plants to reduce CO2 emissions under Section 111(d) of the Clean Air Act and also weakens the “New Source Review” standards that, for almost 30 years, have required old coal plants to install modern pollution control equipment such as scrubbers and selected catalytic reduction controls to reduce harmful SO2 and NOx emissions when they make upgrades.  ELPC and many environmental, public health, governmental and business allies are opposing the proposed Trump Administration rollbacks and will be submitting comments and engaging in advocacy to challenge this regulatory proposal that weakens protections for healthier clean air.

What are the most important things to know about the Trump Administration’s ACE Proposal?

  1. This is a proposal.  The U.S. EPA must fully consider all public comments before finalizing, and this rule will likely be challenged in court.
  2. The ACE rule would help older, highly-polluting coal plants continue to operate by allowing states to either set minimal CO2 reduction requirements or make upgrades that will result in more operations.
  3. The ACE rule would increase use of coal plants by loosening the Clean Air Act’s New Source Review standards so that plants can run and emit more without installing modern pollution control equipment.
  4. The CPP established specific meaningful reduction goals that applied to every state, but under ACE, states decide on goals individually and could require minimal or even no reductions at all.  That is a problem because air pollution crosses state boundaries.

What is this proposal about?

Under Section 111(d) of the Clean Air Act, the U.S. EPA must establish requirements for fossil-fuel electricity generators to reduce emissions of CO2 using the “best system of emissions reductions” that it finds has been “adequately demonstrated.”  In 2015, the U.S. EPA issued the Clean Power Plan, which was put on hold by the United States Supreme Court and has not yet taken effect.  The Trump Administration’s proposed ACE would replace the Clean Power Plan and would fundamentally change the longstanding New Source Review requirements.

What are the three main parts of ACE?

  1. Rules establishing the “best system of emission reduction” as a menu of actions that companies can take to improve the heat rate at individual coal plants.
  2. Rules describing the state process to identify specific technology requirements for each affected plant.
  3. Rules changing the New Source Review program to exempt plants from permitting review if their hourly emissions of SO2, NOx or other pollutants do not increase, even if their annual emissions of those pollutants do increase.

The U.S. EPA asserts the three parts are independent and severable, and could be finalized at different times.

How would the state plan process work under ACE?

If the proposed ACE rule is finalized (and then upheld on appeal), states would then have three years to submit plans to the U.S. EPA.  States would evaluate each of the technologies on the menu of heat rate improvements in the final rule and decide, for each affected power plant in the state, which technologies should be implemented and how much time is needed.  States could consider facility-specific factors such as the remaining useful life of the plant, costs, and physical or other practical challenges in deciding which technologies to require or eliminate for each plant or group of plants.  There is no outside limit on how much time a state can allow for compliance, but if more than two years is allowed, the plan must include a schedule of implementation steps.  The U.S. EPA would have a year to approve or disapprove a state plan after it is submitted.  If it disapproved a plan, U.S. EPA would put a plan in place for that state.

How does ACE differ from the Clean Power Plan?

The most fundamental difference is that the CPP looked at power plants as an integrated network connected by the electric grid and operated as a system.  It established the “best system of emission reduction” looking much more broadly at approaches the power sector was using to effectively reduce CO2, including not only heat rate improvements at individual plants, but use of lower CO2 fuel (natural gas) and zero CO2 generation (e.g., wind and solar energy).  The CPP would achieve far more reductions of CO2 and other air pollutants than the proposed ACE.  CPP also provided for intra- and interstate trading, incentives for early reductions and other flexibilities to support and encourage the industry’s transition to clean renewable energy.  Moreover, the CPP did not alter the New Source Review requirements, but the proposed ACE makes fundamental changes.

Does ACE acknowledge climate change?

ACE does not question the U.S. EPA’s determination that CO2 pollution endangers public health and welfare.

How much CO2 would ACE reduce?

By 2030, ACE would reduce CO2 emissions by at most 1.5% below 2005 levels as compared to where they would be without ACE.  By comparison, the CPP would have reduced CO2 emissions by 19% below 2005 levels compared to where they were projected to be without the CPP.

What are other health and environmental impacts of ACE?

Because compliance with the CPP was expected to lead to replacement of a number of coal plants with natural gas and renewable energy, it was predicted to also achieve co-benefits of reducing SO2 by 24%, NOx by 22% and mercury by 16-17%, and prevent 1,500-3,600 premature deaths and 90,000 childhood asthma attacks, among other health benefits.  By contrast, the U.S. EPA’s analysis shows that ACE overall will reduce those pollutants by about 2% and pollution may actually increase at some plants if efficiency improvements result in the plant operating more.  As a result, the U.S. EPA predicts that ACE could result up to 1,400 more deaths each year and tens of thousands more cases of aggravated asthma.  The U.S. EPA’s analysis of ACE’s costs and benefits is here.

What is New Source Review and what changes are proposed in the ACE rule?

Under the Clean Air Act, new plants and existing plants that expand or upgrade in ways that will increase air pollution must get a permit and install up to date pollution controls.  This is called New Source Review and has been a very important program to ensure that when older power plants are upgraded to extend their useful lives and increase operations, the pollution controls must also be upgraded. The Trump Administration has already adopted several policies that weaken New Source Review.  The ACE proposal would exempt coal plant efficiency upgrades from New Source Review even if they will increase the actual amount of air pollution emitted.

How will various energy business and public interests react to the proposed ACE rule?

The ACE proposal supports coal consumption at power plants because it allows states to require minimal controls (or none at all) and because it encourages investment in coal plants that might not otherwise make additional investments.  Those new investments, especially at coal plants that are becoming uneconomic, could result in their operating more and for a longer period of time than they otherwise would.  The coal mining industry, companies that own many coal plants that have not been retrofitted with modern pollution control equipment, and states with significant coal mines and plants will likely support this rule.

Natural gas, renewable energy, energy efficiency and nuclear energy interests will not support this rule.  Nor will environmental, public health, environmental justice, faith and community-based groups that support actions on climate change solutions and public health improvements.  States and local governments supporting climate action and clean energy will oppose this proposed rule.  Consumer groups will oppose this rule if the cost of the coal plant changes will result in higher electricity rates and prices.

What else should I know about the proposed ACE rule?

As with other recent proposals, the U.S. EPA is now using a very different approach to assessing the costs and benefits:  here, decreasing the value of climate benefits (by only counting those within U.S. borders) and reducing the value of health co-benefits associated with less soot and smog pollution.

What are the next steps?

The U.S. EPA is providing a 60-day comment period from when its proposed rule is published in the Federal Register in September.  There will likely be requests for a longer comment period.  The U.S. EPA will hold public hearings where the public can express their views in person.

How can I find out more about the U.S. EPA’s view of the proposed ACE rule?

Fact sheets, the preamble and proposed rule, and the Regulatory Impact Analysis are all available here.

How can I comment on this proposed ACE Rule?

Learn how to comment here.

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