U.S. EPA Rules and CARB Comments on the Clean Power Plan
Existing Power Plants
On August 3, 2015, U.S. EPA released the final Emission Guidelines to regulate CO2 emissions from existing power plants under Section 111(d) of the Clean Air Act (CAA). That regulatory package is also known as the Clean Power Plan (CPP) and is codified in Subpart UUUU of Chapter 40, Part 60 of the Code of Federal Regulations. The rule requires each state to establish performance standards for CO2 emissions from certain existing power plants. U.S. EPA estimates that the proposed rule will reduce CO2 emissions from the power sector by 32 percent below 2005 levels by 2030.
During the rulemaking process, the California Air Resources Board (CARB or Board) worked closely with other State energy agencies to evaluate CPP and provided comments. U.S. EPA listened to California, and the final rule includes many provisions that allow California to meet the requirements of CPP while maintaining and extending the State’s programs established under Assembly Bill 32 (the Global Warming Solutions Act of 2006, Nuñez, Chapter 488, Statutes of 2006).
CARB developed California’s compliance plan for this federal rule while consulting with other State regulators, including the California Energy Commission, California Public Utilities Commission, and California's air districts. The plan integrates federal compliance requirements with the State’s existing climate goals, including the Cap-and-Trade Program. Under this approach, power plants participating in the Cap-and-Trade Program will have a federally enforceable obligation to comply with key program requirements, while other participants in the market program will continue to have only State-enforceable obligations. Cap-and-Trade Program compliance (along with compliance with the supporting requirements of CARB’s Regulation for the Mandatory Reporting of Greenhouse Gas Emissions) will also ensure CPP compliance. On September 18, 2017, the Board approved California’s final proposed plan for compliance with CPP. However, CPP remains stayed due to ongoing litigation.
On October 16, 2017, U.S. EPA issued a Proposal to Repeal the Clean Power Plan following Executive Order 13783. Despite uncertainty on the implementation of CPP at the federal level, California continues to uphold the rules outlined in CPP and commits to carry out the compliance plan to reduce emissions from the power sector. CARB submitted comments opposing U.S. EPA’s proposed repeal rule on April 26, 2018.
On August 31, 2018, U.S. EPA proposed a replacement to the CPP called the Affordable Clean Energy (ACE) Rule. The ACE Rule would consist only of source-specific measures to reduce CO2 emissions. It would also create a loophole for New Source Review preconstruction permitting requirements for existing power plants. The ACE Rule would achieve very minimal emissions reductions compared to CPP, and could potentially increase emissions. CARB submitted comments opposing the ACE Rule on October 31, 2018.
Proposed Federal Plan for the Clean Power Plan
Also on August 3, 2015, U.S. EPA released a proposed federal plan for existing fossil fuel power plants under CPP. (An inadvertent error correction memo was later released on September 2, 2015.) The proposed federal plan serves two purposes: (1) to establish requirements directly applicable to a state’s affected power plants in the case where a state or other jurisdiction does not submit an approvable plan, and (2) to provide model trading rules that states can adopt or tailor for implementation. The proposal also contains enhancements to CAA section 111(d) framework regulations related to the process and timing for state compliance plan submissions and U.S. EPA actions. CARB’s comment letter outlines the State’s experience with implementing the Cap-and-Trade Program and recommendations for improving the proposed federal plan. Because CARB is using the state-measures approach for implementation of CPP in California, California would not fall under the federal plan as long as U.S. EPA approves its state plan.
New, Modified, and Reconstructed Power Plants
On September 20, 2013, U.S. EPA proposed a separate but related rulemaking under Section 111(b) of the Federal CAA to limit CO2 emissions from future fossil fuel power plants. CARB worked closely with other State energy agencies to evaluate U.S. EPA's proposed power plant rules and developed comments on U.S. EPA's proposal.
On August 3, 2015, U.S. EPA released the final rule to limit CO2 emissions from new, modified, and reconstructed fossil fuel power plants. The final rule, codified in Subpart TTTT of Chapter 40, Part 60 of the Code of Federal Regulations, requires certain power plants constructed after January 8, 2014, or that commenced reconstruction after June 18, 2014, to meet specific CO2 emission standards.
On December 20, 2018, U.S. EPA published a proposed rule to revise the new power plant standards. Specifically, U.S. EPA proposes to revise the CO2 emission standards for new coal-fired power plants to make them much less stringent. CARB opposes U.S. EPA’s efforts to rollback the Section 111(b) rules for CO2 emissions from new power plants.