Continuing to undo major regulatory initiatives of the previous administration, the Environmental Protection Agency (EPA) announced in June that it is issuing the Affordable Clean Energy (“ACE”) rule. The ACE rule is a response to the Obama administration’s Clean Power Plan (“CPP”). The courts stayed the CPP during the opening stages of litigation and it remains on hold.
Unlike its predecessor, the ACE rule defines the Best System of Emissions Reduction (“BSER”) for greenhouse gas emissions to those that can occur “inside the fence line” of existing power plants. The ACE rule describes BSER as heat rate improvement, a measure of efficiency, through technology, equipment upgrades, and operating and maintenance practices, and allows states to establish unit-specific standards of performance. The EPA identified six “candidate technologies” for states to consider in applying BSER, such as neural network/intelligent sootblowers, and air heater and duct leakage control.
The ACE rule was swiftly criticized by some states and environmental organizations, primarily for allowing more greenhouse gas emissions than would have occurred under the CPP. The EPA notes that the ACE rule will still result in fewer emissions than a no-regulation baseline, that a 28% reduction in CO2 emissions has occurred from 2005-2017, and that the utility sector is on track to meet CO2 reduction targets under the CPP due to factors such as market forces (the decreasing price of natural gas) and technology improvements. Ultimately, however, the EPA rests its rationale for the change from the CPP to the ACE rule on the lack of legal authority under the CPP for requiring utilities to undertake changes that are not applicable to specific emissions units. Such “outside the fence line” changes under the CPP included requirements for fuel-switching, e.g., from coal to natural gas. In its description of the ACE rule, EPA also continues to stress the significant role state regulatory authorities were given under the Clean Air Act that are being honored under the new rule.
The EPA has bifurcated the ACE rule from the rule repealing the CPP. This separation essentially gives the EPA two opportunities for undoing the CPP: Even if the ACE Rule is ultimately struck down by courts, it remains possible that the courts would accept the repeal of the CPP. In the end, there can be only one, since both the ACE rule and the CPP attempt to provide different definitions for BSER.
Greg Munson is the former general counsel at the Florida Department of Environmental Protection (FDEP). Since 2013, he has been a shareholder practicing environmental law and government affairs at the law firm of Gunster, working in Tallahassee, Florida, where he represents industrial, mining, utility, and agricultural clients.
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