Clean Power Plan: Power Plant Compliance and State Goals

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EPA’s historic Clean Power Plan, is a first-of-its-kind step to cut the harmful carbon pollution fueling climate change from our nation’s power plants based on more than two years of extensive outreach, plus the 4.3 million public comments we received. Compared with last year’s proposal, our final plan cuts over 70 million more tons of carbon pollution, making it more ambitious, more achievable and more affordable, too.

There are two key reasons our final rule works: 1) it follows a more traditional Clean Air Act approach to reduce air pollution, and 2) it gives states and utilities even more options and more time to reach their pollution reduction goals than our proposal did.

Uniform Performance Rates

At the heart of our plan are its uniform emission rates – one for fossil steam units (coal, oil, and gas) and one for natural gas combined cycle (NGCC) units. The standards limit the amount of carbon pollution released for every power plant covered by the rule – and they are the same standards for every coal plant and for every NGCC plant in every state.

The rates are achievable because no power plant has to meet the rates on its own.  It can use the fact that it operates on an interconnected grid to access a range of low- or zero-emitting energy resources to come into compliance.

The important point to keep in mind is that power plants do not operate in isolation. Utilities have bought, sold and transmitted electricity across state lines for decades, and regional power grids are a major reason electricity is affordable and reliable. Pollution doesn’t stop at state lines either. With the Clean Power Plan, we’re cutting pollution in the same way we generate and distribute electricity—through an interconnected grid.

In fact, relying on the performance rates is one way that a state can put its power plants in a position to use emissions trading between and among power plants in different states to access those clean energy resources – and to integrate emissions reduction strategies with the way the grid moves electricity back and forth across broad multi-state regions.

State Goals

Each state’s goal represents a blend of the performance rate for coal and the performance rate for gas weighted by the number of coal and gas plants in the state. States can choose to comply simply by applying the performance rates to each unit operating within their respective borders, especially if they include emissions trading as a compliance option for their units. States can also comply with the law by using their overall emissions goals and adopting a portfolio of measures that result in emissions reductions.

While the utilities are responsible for reducing emissions, the state plans are the means of accounting for and ensuring that the reductions take place in line with the national standards and timing established by the Clean Power Plan. And the state rate- and mass-based goals are a way of giving states additional options and flexibility for implementing the two performance standards.

Emissions Trading
When we hold power plants of the same type to the same standards, it means that their reductions are interchangeable – creating a system that’s ready for trading. The built-in ability to trade emissions gives states even more flexibility in how they achieve their carbon pollution reduction goals.

A Glide Path

Further ensuring that the standards are achievable is that the final rule does not require any power plant to meet the standards – or whatever equivalent measure the state imposes – all at once. Instead, states can determine their own emissions reduction trajectories over the period between 2022 and 2029, provided that overall they meet their interim targets “on average” over that period. The final rule ensured this important flexibility by initiating the mandatory compliance period in 2022, rather than 2020 as at proposal, and phasing in the two performance standards and the accompanying state goals. This phase-in is reflected in the performance rates and in the state goals that correspond to those rates, again calculated as a weighted blend

Final Goals in 2030
Ultimately, by 2030, power plants across the country must meet the performance standards using the tools and methods available and within the context of the interconnected grid. Because some states’ power plant fleet includes more coal plants, some states 2030 goals appear more stringent than others. Some states have adopted policies or seen changes in their energy markets that have already put them on a path to lower emissions in 2030.  These states’ reduction requirements are relatively smaller. Either way, every state will be achieving emissions reductions along the timeline between 2012 and 2030. States that have already seen their emissions decline thanks to either policy choices or market shifts will have to take action to make sure that those trends continue.

These two tables tell the Clean Power Plan’s story on a state by state basis, and they provide a good sense of what states and the power system will accomplish by 2030 under the program.

With our final rule, we are setting smart, uniform targets for power plants across the country, but that’s nothing new. It’s a proven approach that EPA has used to reduce air pollution under the Clean Air Act for decades. We’re following long-standing legal precedent to create smart, achievable standards and facilitate trading among plants so the cheapest reductions come first.

More information about how and why goals changed is available at http://www.epa.gov/airquality/cpp/fs-cpp-key-changes.pdf.