Karen Frantz
GHG Monitor
2/14/2014
As the Environmental Protection Agency works to craft a new rule that will set greenhouse gas emission standards for existing power plants, some stakeholders have expressed that it is critical that the regulations provide adequate flexibility, as well as opportunities for inter-state collaboration, sufficient compliance time, and other conditions, acting Assistant Administrator for the EPA’s Office of Air and Radiation Janet McCabe said at a meeting of the National Association of Regulatory Utility Commissioners held in Washington this week. The anticipated rule, which President Obama directed the Agency to propose by June 2014 and finalize by June 2015, will fall under the Clean Air Act’s 111(d) existing source program, and in setting the standards the federal government will issue broad guidance for states, who will then develop state implementation plans to meet the new standards.
McCabe said it makes sense to issue the guidelines under section 111(d) because the states are in a better position to figure out what is the best outcome. “The states are in the lead on these issues already,” McCabe said, referring to efforts to reduce greenhouse gas emissions. “States are designing programs, states are implementing programs, states are working with their industries and with their stakeholders to be thinking forward to the future generation that this country needs in order to provide reliable energy over the long term and to take into account the things that we all see happening around us.”
Stakeholders Weigh In
McCabe said she was hearing much commonality among stakeholders on the issues they said are important to address while crafting the rule—and many of those stakeholders themselves voiced their concerns about how the rule will address certain unknowns during two panels at the NARUC winter meeting. Chairman of the Colorado Public Utilities Commission Joshua Epel said one thing the EPA needed to determine is what it means by the “state.” “EPA traditionally interacts with state air agencies,” he said. “They develop a state implementation plan, they implement it, whether it’s a new source performance standard or MAT. … This is different. You all are coming up with guidelines and depending on how you view the state, you could [try] to bind state [Public Utility Commissions], regional bodies, and frankly, I don’t think you have the authority to do that. So we’re going to have to really work carefully on what is a state, how do we interact with our own state environmental regulators?”
He also said the EPA needed to determine what the enforcement mechanisms would be—including what would happen if an individual plant or company is not reducing greenhouse gas emissions—and how the EPA would base rejections or approvals of state implementation plans. Commissioner of the West Virginia Public Service Commission Jon McKinney also said he thought the EPA should craft guidelines that are based on reductions that could be achievable at the sources, that respect the primacy of states, that recognize the remaining useful life of units, and that provide the time necessary for states to develop plans—and potentially allow different compliance times for different states—among other considerations. Paul Bailey, Senior Vice President for Federal Affairs and Policy at the American Coalition for Clean Coal Electricity, also said the EPA should take into account such factors as fuel diversity, compliance costs, energy price increases and the possibility of stranded investments.
But although many stakeholders’ concerns highlighted at the NARUC meeting appeared to have commonality, a statement at one panel underscored the daunting task EPA has before it in devising rules that will please everyone: A utility official from Connecticut told the panel that in his view there was “no point in having a conversation [on greenhouse gas emissions reduction] unless it includes the states to our south and west because that’s where the pollution comes from.” Epel responded: “This is what makes this so singularly difficult. We can’t ascribe blame at this point. EPA is going to have to take reality from where it is.” He added: “The more difficult challenge is, how do you take the South as it is, or the Midwest, or energy intensive states and find a program which is equitable and … that their state can afford.”
