In a letter to the EPA, officials with environmental, energy, and public utility agencies of 15 states requested that the Agency “develop a stringent but flexible framework” for its upcoming Clean Air Act (CAA) regulations to control greenhouse gas (GHG) emissions from existing power plants.  Essentially the same message was sent to the EPA on the same date by the attorneys general (AGs) of 11 states, most of which were also represented in the state agency letter.

Under an initiative being led by President Obama, the EPA re-proposed New Source Performance Standards (NSPS) for carbon emissions from new coal-fired power plants.  Once those regulations are made final, the Agency must issue NSPS for carbon emissions from existing coal-fired power plants, an action that is expected to have a far greater impact on industry than new power plant regulations.  The president had directed the EPA to propose requirements for existing power plants by June 1, 2014, and publish final requirements by June 1, 2015.

Flexible compliance

Both letters support the regulation of GHGs from new and existing plants.  Both letters also asked that the EPA factor into its rulemaking the many actions taken by individual states and groups of states.  The intent of this “flexibility” is to continue to reap the benefits of state programs and also give credit for benefits states have already achieved. 

“Flexible compliance options for states,” say the state agency officials, “recognize that different pathways may be appropriate for different states, that flexibility allows states to cost effectively achieve reductions by identifying opportunities created by the complex and interconnected nature of the electricity system, and that flexibility also facilitates efficient integration with other environmental obligations and reliability needs.”

The state agency letter adds that through market-based programs, renewable portfolio standards, energy-efficiency resource standards and funding commitments, utility planning, and other efforts, states have reduced carbon pollution from the electricity sector by 20 percent from 2005 to 2011, and similarly improved the net carbon emissions rate 19 percent over the same time period from 941 to 759 pounds of CO2 per megawatt hour of electricity generated. Many individual states have achieved even greater reductions in carbon pollution—in the range of 30 percent to 46 percent—in that time period, the letter says.

RGGI and AB 32

Two state-based initiatives highlighted in the letter are the Northeast’s Regional Greenhouse Gas Initiative (RGGI) and California’s Global Warming Solutions Act (AB 32).  In the RGGI program, which targets power plants, nine states have together reduced carbon pollution in their region by over 40 percent from 2005 to 2012.  The new RGGI cap of approximately 78 million tons in 2020 is more than 50 percent below 2005 levels.

California’s AB 32 contains a cap that is projected to reduce economywide GHG emissions by 25 percent from 2006 to 2020.  Regarding power plants, California estimates that emissions from in-state and imported power fell by 16 million metric tons, or 16 percent, from 2005 to the 2010 to 12 averaging period (from 108 million metric tons CO2-equivalant [CO2e] to 91 million tons CO2e).  By 2025, California expects to cut utility sector emissions to below 80 million metric tons CO2e, a roughly 25 percent reduction from 2005 levels in that sector.

Renewable standards

Approximately 30 states have renewable portfolio standards that displace carbon-intensive fossil fuel generation, and 25 states have energy-efficiency programs.  Laws in some states require that public utility commissions (PUCs) undertake carbon reduction efforts.  For example, Colorado’s Clean Air-Clean Jobs Act authorizes the state PUC to approve plans by utilities to reduce emissions, largely through plant retirements.  Also, a Minnesota law allows utilities to recover costs for carbon reductions not required by the federal government.

States are also promoting combined heat and power, and Illinois is requiring that any new power plant capture and sequester more than half the carbon emissions it would otherwise emit. 

All-inclusive BSER

The state agency letter specifically urges the EPA to:

• Establish the performance level of the standard based on a best system of emission reduction (BSER) that reflects the full range of approaches that states have successfully demonstrated can cost-effectively reduce carbon pollution from the electricity system as a whole.
• Establish the form of the emissions guideline in a way that equitably recognizes the different starting points and circumstances of different states, including the pollution reductions achieved by states through climate and clean energy programs.
• Allow for a variety of rigorous state compliance options, including options for compliance through participation in regional emissions budget trading programs and state portfolio programs.

The state agency letter

The AG letter