For several years, the Obama Administration’s emission regulations for reducing carbon dioxide (CO2) from coal- and natural gas-fired power plants were the hot topic in energy and environmental policy. However, given the change in Administration, attention has shifted to state and regional efforts to address the changing generation fleet.
The Clean Power Plan (CPP), for all the rhetoric, was a fairly limited performance standard for coal- and gas-power plants, both existing and new, measured in pounds of CO2 per megawatt-hour. The rules would have required a minimum efficiency from the fossil fleet. However, the Environmental Protection Agency (EPA) offered a variety of compliance options, chosen by states on behalf of their generating fleet. This quickly multiplied the myriad combinations of potential energy and environmental outcomes.
The rules for existing plants were scheduled to begin phasing in in 2022, ramping up to full stringency in 2030. They were subject to litigation immediately. In fact, the Attorney General of Oklahoma-turned-current EPA administrator, Scott Pruitt, had unsuccessfully sought to litigate the proposal. However, in a first for a regulatory rule, the Supreme Court stayed the final rules in early 2016 prior to argument at the D.C. Circuit in September 2016. Given the Trump Administration’s hostility to the rules, no one expects the 2015 iteration of these rules to take effect.
The White House is currently reviewing an EPA proposal to formally rescind the CPP.
Given federal inaction, a number of states and regions have already begun to take action and more are expected to ramp up efforts. California has recently recommitted to a multi-sector cap-and-trade program along with several other programs targeted at reducing emissions and increasing deployment of clean energy. The state is also in the process of linking these programs to other states and Canadian Provinces.
The Regional Greenhouse Gas Initiative (RGGI) is nearing the end of a program review. The expected result is a slight increase in program stringency. The Governor of Virginia, Terry McAuliffe, has directed regulators to explore market-based reduction options. Recently, the New York ISO (NYISO) and Department of Public Service (DPS) released a study on how a carbon price in the energy market could achieve several of the state’s policy objectives far more cost-effectively than disparate efforts. In contrast, other states are not working on this issue or are joining the federal government in seeking to remove emissions reduction obligations.
In short, what’s next is a fractured energy policy landscape for the time being. To stay up-to-date on the most current energy news, subscribe to our communications.