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U.S. EPA Proposes to Relax Power Plant Carbon Emissions Restrictions, Fulfilling Trump Campaign Promise

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11 September 2018

On August 21, 2018, the U.S. Environmental Protection Agency (EPA) published its proposed Affordable Clean Energy (ACE) rule, fulfilling a Trump campaign promise to eliminate strict coal plant emission limits that President Obama sought to impose in the 2015 Clean Power Plan (CPP).

The proposed ACE rule is now open for public comment, with a deadline of October 30, 2018

EPA’s published Fact Sheet on the proposed ACE rule can be found here.  The formal Federal Register notice can be accessed here.

As a result of a stay imposed by the U.S. Supreme Court following various legal challenges, principally led by industry supporters, the CPP was never implemented  Like the ACE rule, this new proposal is also likely to face legal challenges from NGOs, states and other stakeholders that favor more and stricter regulation.

What the New Rules Would Do

If it is promulgated as proposed and survives legal challenge, the new ACE rule would:

  • Cede substantial regulatory control to states;
  • Require states to develop and submit to the EPA plans to address greenhouse gas emissions from existing coal- fired power plant based on “emission guidelines” to be established by the EPA
  • Identify permissible coal-burning technologies, to be used by the states when setting the power plant performance standards in their state plans;
  • Reduce operational triggers that require full plant overhaul;
  • Incentivize efficiency improvements at existing power plants; and
  • Extend deadlines for submittal and approval of state plans.

What happens next?

The proposed ACE rule is now open for public comment, with a deadline of October 30, 2018.  Comments, identified by “Docket ID No. EPA-HQ-OAR-2017-0355,” can be submitted here. More information on how to submit comments can be found the Federal Register’s website.

Following the public comment period, the EPA is expected to hold at least one public hearing.

Outlook for the future?

It is unlikely that there will be any formal action on the ACE rule before the midterm elections scheduled for November 2018.  What is likely, however, is that the ACE rule (like the CPP) will face vigorous legal challenge, delaying its implementation and perpetuating continued regulatory uncertainty for power plant operators, owners, and investors for the foreseeable future.