EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants: Frequently Asked Questions
Congressional research reportDec 10, 2014
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EPA’s Proposed Greenhouse Gas Regulations
for Existing Power Plants: Frequently Asked
Questions
James E. McCarthy
Specialist in Environmental Policy
Robert Meltz
Legislative Attorney
Jane A. Leggett
Specialist in Energy and Environmental Policy
Jonathan L. Ramseur
Specialist in Environmental Policy
Alissa M. Dolan
Legislative Attorney
December 10, 2014
Congressional Research Service
7-5700
www.crs.gov
R43572
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants
Summary
Taking action to address climate change by reducing U.S. emissions of greenhouse gases (GHGs)
is among President Obama’s major goals. At an international conference in Copenhagen in 2009,
he committed the United States to reducing emissions of greenhouse gases 17% by 2020, as
compared to 2005 levels. At the time, 85 other nations also committed to reductions. In
November 2014, the President set a further goal: a 26% to 28% reduction to be achieved in
2025—jointly announced with China’s Xi Jinping, who set a goal for China’s emissions to peak
by 2030.
Since U.S. GHG emissions peaked in 2007, a variety of factors—some economic, some the effect
of government policies at all levels—have brought the United States more than halfway to
reaching the 2020 goal. Getting the rest of the way and reducing emissions further by 2025 would
likely depend, to some degree, on continued GHG emission reductions from electric power
plants, which are the largest source of U.S. emissions.
In June 2013, the President released a Climate Action Plan and directed the Environmental
Protection Agency (EPA) to propose standards for “carbon pollution” (i.e., carbon dioxide, the
principal GHG) from existing power plants by June 2014 and to finalize the standards in June
2015. Under the President’s timetable, by June 2016, states would be required to submit to EPA
plans to implement the standards.
On June 2, 2014, EPA responded to the President’s directives by proposing the standards for
existing power plants. The proposed rule was published in the Federal Register on June 18, 2014.
The proposal relies on authority given EPA by Congress decades ago in Section 111(d) of the
Clean Air Act (CAA). This section has been little used—the last use was in 1996—and never
interpreted by the courts, so a number of questions have arisen regarding the extent of EPA’s
authority and the mechanisms of implementation. EPA tends to refer to the regulations as
“guideline documents”—although that term is not used in the statute—perhaps to indicate that the
section is intended to give primary authority to the states. The proposed guideline document
would set interim (2020-2029 averages) and final (2030) emission rate goals for each state based
on its unique circumstances. The goal for each state was derived from a formula based on four
“building blocks”—broad categories that describe different reduction measures; in general,
however, the policies to be adopted to reach these goals would be determined by the states, not
EPA. Each state has the flexibility to reach its goal however it chooses, without needing to
“comply” with the assumptions in its building blocks.
EPA faced a number of issues in developing the proposed regulations:
•
How large a reduction in emissions would it propose, and by when?
•
How much flexibility would EPA give to states?
•
Would it adopt a “mass-based” limit on total emissions or a rate-based (e.g.,
pounds of carbon dioxide per megawatt-hour of electricity) approach?
•
What role might state emissions cap-and-trade systems play in meeting the
goals?
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EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants
•
Will compliance be determined only by the actions of power companies (i.e.,
“inside the fence” actions) or will actions by energy consumers (“outside the
fence”) be part of compliance strategies?
•
Would states and power companies that have already reduced GHG emissions
receive credit for doing so? Would account be taken of states and power
generators with high levels of emissions, perhaps due to heavy reliance on coalfired power? Would they be required to reduce emissions more than others, less
than others, or the same?
•
What role would there be for existing programs at the state and regional levels,
such as the Regional Greenhouse Gas Initiative (RGGI), and for broader
greenhouse gas reduction programs such as those implemented pursuant to
California’s AB 32?
This report summarizes EPA’s proposal and describes how EPA answered these questions. In
addition to discussing details of the proposed rule, the report addresses a number of questions
regarding the reasons EPA is proposing this rule; EPA’s authority under Section 111 of the CAA;
EPA’s previous experience using that authority; the steps the agency must take to finalize the
proposed rule; and other background questions.
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Contents
Background ...................................................................................................................................... 1
Q: Why did EPA propose this rule? ..................................................................................... 1
Q: What other steps has EPA taken to reduce GHG emissions? ......................................... 2
Q: How much progress has the United States made in reducing GHG emissions? ............ 3
Q: How much does the generation of electricity contribute
to total U.S. GHG emissions? .......................................................................................... 3
Statutory Authority .......................................................................................................................... 5
Q: Under what authority is EPA proposing these regulations? ........................................... 5
Q: How is the term “standards of performance,” required by Section 111(d),
defined in statute and case law? ....................................................................................... 6
Q: When has EPA previously used this authority? .............................................................. 7
Q: Why has Section 111(d) been infrequently used? .......................................................... 8
Q: What relationship does this proposal have to EPA’s January 2014 proposal
of GHG standards for new fossil-fueled power plants? ................................................... 8
Q: Is the rule released on June 2, 2014, a final rule?........................................................... 8
The Proposed Rule ........................................................................................................................... 9
Q: By how much would the proposed rule reduce CO2 emissions? ................................... 9
Q: Did EPA propose more than one option for the standards? ............................................ 9
Q: What is the range of state emission-rate goals?............................................................ 10
Q: How did EPA establish the state-level goals in the proposed rule? .............................. 11
Q: Would states and companies that have already reduced GHG emissions receive
credit for doing so?......................................................................................................... 14
Q: How does EPA’s proposed rule interact with existing GHG emission reduction
programs in the states, namely the Regional Greenhouse Gas Initiative and
California’s cap-and-trade system? ................................................................................ 15
Q: What role is there for “outside-the-fence” emission reductions? ................................. 15
Q: Does EPA’s proposal allow states to convert their emission rate targets into
mass-based, emission targets? ........................................................................................ 16
Q: Would EPA’s rulemaking require states to reduce their emission rates in 2020? ......... 18
Q: How would new fossil-fuel fired power plants and their resulting electricity
generation and emissions factor into a state’s emission rate calculations? .................... 18
Q: What role does nuclear power play in EPA’s proposal? ............................................... 19
Q: What additional information did EPA provide in its October 2014 notice of
data availability? ............................................................................................................ 20
Q: Do EPA’s proposed emission rate targets apply to electric generating units in
U.S. territories and/or areas of Indian country? ............................................................. 20
Next Steps ...................................................................................................................................... 21
Q: What are the next steps? How will EPA finalize this rule? .......................................... 21
Q: What role does OIRA (i.e., the White House) play in developing the final rule? ........ 22
Q: When will the final rule take effect, and how will it be implemented? ........................ 23
Q: What happens if a state fails to submit an adequate plan by the
appropriate deadline? ..................................................................................................... 23
Costs and Benefits of the Rule....................................................................................................... 23
Q: What role will cost play in EPA’s choice of emission standards? ................................ 23
Q: What are EPA’s estimates of the costs of this rule? ...................................................... 24
Q: What are the benefits EPA estimates for the proposed Section 111(d) rule? ................ 25
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Q: Under Section 111(d), are the benefits of the rule required to exceed its cost? ........... 26
Congressional and Judicial Review ............................................................................................... 26
Q: Does the Congressional Review Act apply to the proposed rule? ................................ 26
Q: How will judicial review of the proposed rule work? .................................................. 27
For Further Information ................................................................................................................. 28
Q: Who are the CRS contacts for questions regarding this rule? ...................................... 28
Figures
Figure 1. Percent Change in U.S. Greenhouse Gas (GHG) Emissions, the Economy, and
Population ..................................................................................................................................... 4
Figure 2. U.S. CO2 Emissions from Electricity Generation, Historical and Projected .................. 10
Tables
Table 1. State CO2 Emission Rate Baseline (2012) and Emission Rate Goal (2030) .................... 12
Table 2. EPA’s Conversion of CO2 Emission Rates to Mass-Based Emission Targets .................. 16
Table 3. U.S. Territory and Indian Land CO2 Emission Rate Baseline (2012) and
Emission Rate Goal (2030)......................................................................................................... 21
Contacts
Author Contact Information........................................................................................................... 29
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O
n June 2, 2014, the Environmental Protection Agency (EPA) proposed standards for
greenhouse gas (GHG) emissions from existing fossil-fueled power plants under Section
111(d) of the Clean Air Act.1 The proposal appeared in the Federal Register, June 18,
2014.2 The rule and various supporting materials are posted on EPA’s website:
http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule.
Publication in the Federal Register began a public comment period, which ran until December 1,
2014. EPA received almost 1.5 million comments on the proposal.3 The agency also held public
hearings in Denver, Atlanta, Pittsburgh, and Washington, DC, during the week of July 28, 2014.
Prior to this rule’s release, EPA conducted significant outreach to interested parties. According to
Bloomberg BNA, “Senior Environmental Protection Agency officials consulted with at least 210
separate groups representing a broad range of interests in the Washington, DC, area and held
more than 100 meetings and events with additional organizations across regional offices as the
agency prepared its carbon pollution regulation for existing power plants.”4
The proposal generated substantial interest even before its release. The economy and the health,
safety, and well-being of the nation depend on a reliable and affordable power supply, which
many contend would be adversely affected by controls on GHG emissions. At the same time, an
overwhelming scientific consensus has formed around the need to slow long-term global climate
change. To determine how the rule addresses these issues, congressional committees have asked
EPA officials numerous questions about the rule, and individual Members have written EPA
seeking additional information about the rule’s potential impacts.5
In order to provide basic information about EPA’s pending action, this report addresses the
proposal in a Q&A format.
Background
Q: Why did EPA propose this rule?
A: EPA proposed emissions guidelines to limit carbon dioxide (CO2) emissions from existing
power plants under Section 111(d) of the Clean Air Act (CAA) for a variety of reasons. Some
important context includes the following:
1
42 U.S.C. §7411(d).
U.S. EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,”
Proposed Rule, 79 Federal Register 34830, June 18, 2014.
3
More than 22,000 public submissions on the proposal can be viewed at http://www.regulations.gov/
#!docketDetail;D=EPA-HQ-OAR-2013-0602. An interactive map allowing users to search for comments by state
officials can be found at http://bipartisanpolicy.org/energy-map/?_cldee=am1jY2FydGh5QGNycy5sb2MuZ292.
4
“EPA Consulted with Hundreds of Groups on Carbon Rule for Existing Power Plants,” Daily Environment Report,
April 8, 2014. For EPA’s discussion of the pre-proposal outreach effort, see Section III of the Preamble to the proposed
rule, “Stakeholder Outreach and Conclusions,” 79 Federal Register 34845-34851.
5
See, for example, the letter from a bipartisan group of 47 Senators to EPA Administrator Gina McCarthy, May 22,
2014, at http://www.fischer.senate.gov/public/_cache/files/79d2321e-175c-4456-b4c7-f9b600e15288/5.22.14-senateghg-dear-colleague-letter.pdf.
2
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•
The Supreme Court in Massachusetts v. EPA in 2007 determined that “air
pollutant,” as used in the CAA, covers GHGs.6
•
In December 2010, EPA entered into a settlement agreement to issue New Source
Performance Standards for GHG emissions from electric generating units (EGUs)
under Section 111(b) of the CAA, which standards, once finalized, trigger EPA’s
responsibilities under Section 111(d) covering existing EGUs.7
•
In the context of U.S. commitments under a 1992 international treaty, the United
Nations Framework Convention on Climate Change (UNFCCC), President
Obama pledged in 2009 to reduce U.S. GHG emissions by 17% below 2005
levels by 2020 and by 80% by 2050.8 In November 2014, President Obama
announced an additional interim goal to reduce U.S. GHG emissions by 26%28% by 2025, in the context of negotiations toward a 2015 agreement applying to
all countries to address climate change beyond 2020.
EPA had already addressed GHG emissions from the other main source of GHG emissions, motor
vehicles. Simultaneously with President Obama, China’s President Xi Jinping announced a
voluntary target to “peak” China’s CO2 emissions by 2030 and increase its use of non-fossil
energy to around 20% by 2030. The European Union is “on track” to reach its target of 20%
below 1990 levels by 2020 and has pledged to reduce its GHG emissions to 30% below 1990
levels by 2030.
Q: What other steps has EPA taken to reduce GHG emissions?
A: EPA has already promulgated GHG emission standards for light-duty and medium- and heavyduty vehicles, using its authority under Section 202 of the CAA.9 Light-duty vehicles (cars,
SUVs, vans, and pickup trucks) and medium- and heavy-duty vehicles (including buses, heavy
trucks of all kinds, and on-road work vehicles) are collectively the largest emitters of GHGs other
than power plants. Together, on-road motor vehicles accounted for nearly 25% of U.S. GHG
emissions in 2012.
Under the promulgated rules, standards for light-duty vehicles first took effect for Model Year
(MY) 2012. Allowable GHG emissions will be gradually reduced each year from MY2012
through MY2025. In MY2025, emissions from new vehicles must average about 50% less per
mile than in MY2010. The standards for heavier-duty vehicles began to take effect in MY2014.
They will require emission reductions of 6% to 23%, depending on the type of engine and
6
Massachusetts vs. EPA, 549 U.S. 497 (2007), actually involved GHG emissions from motor vehicles, not power
plants. In 2011, however, the Court explicitly ruled that “air pollutant” includes GHGs when applied to power plants
under Section 111. American Elec. Power Co., Inc. vs. Connecticut, 131 S. Ct. 2527, 2537-38 (2011).
7
See CRS Report R41103, Federal Agency Actions Following the Supreme Court’s Climate Change Decision in
Massachusetts v. EPA: A Chronology, by Robert Meltz, p. 6.
8
See CRS Report R40001, A U.S.-Centric Chronology of the United Nations Framework Convention on Climate
Change, by Jane A. Leggett; and CRS Report R43120, President Obama’s Climate Action Plan, coordinated by Jane
A. Leggett.
9
See CRS Report R40506, Cars, Trucks, and Climate: EPA Regulation of Greenhouse Gases from Mobile Sources, by
James E. McCarthy and Brent D. Yacobucci; and CRS Report R42721, Automobile and Truck Fuel Economy (CAFE)
and Greenhouse Gas Standards, by Brent D. Yacobucci, Bill Canis, and Richard K. Lattanzio.
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vehicle, when fully implemented in MY2018. A second round of standards, to address MY2019
and later medium- and heavy-duty vehicles, is currently under development at EPA.10
The promulgation of standards for motor vehicles also triggered Clean Air Act requirements that
new major stationary sources of emissions (power plants, refineries, etc.) obtain permits for their
GHG emissions, and install the Best Available Control Technology, as determined by state and
EPA permit authorities on a case-by-case basis, prior to construction. The Supreme Court upheld
that position on June 23, 2014, provided that the sources were already required to obtain permits
for other conventional pollutants.11
The GHG permitting requirements for stationary sources have been in place since 2011, but have
been limited by EPA’s “Tailoring Rule” to the very largest emitters—about 200 facilities, so far.
The Court’s June 2014 decision invalidated the Tailoring Rule, but found that EPA could limit
GHG permit requirements to “major” facilities, so-classified as a result of their emissions of
conventional pollutants. In so doing, the Court limited the pool of potential GHG permittees to a
number similar to what the Tailoring Rule would have provided.
Q: How much progress has the United States made in reducing
GHG emissions?
A: The question of how much progress has been made depends on the base year chosen for
comparison. In 2012, U.S. GHG emissions were 6,526 million metric tons (mmt) of CO2equivalent12—slightly less than 5% above 1990 emission levels. This is 10% below GHG
emission levels in 2005, and more than halfway toward meeting President Obama’s pledge to
reduce U.S. GHG emissions to 17% below 2005 levels by 2020. U.S. GHG emissions peaked in
2007 at 7,325 mmt CO2e.
As shown in Figure 1, during the period from 1990 to 2012, U.S. economic activity, measured as
gross domestic product (GDP, adjusted for inflation), rose 73% while population increased 26%.13
Q: How much does the generation of electricity contribute
to total U.S. GHG emissions?
Electricity generation accounted for about 31% of all U.S. GHG emissions in 2012. GHG
emissions from electricity generation rose during 1990 to 2012 by 11%, while all other sources of
GHG emissions grew by an average of 2%. GHG emissions from electricity generation in 2005
were 32% above 1990 levels, peaking in 2007 at 2,413 mmt CO2e.
10
For additional information on these requirements, see CRS Report R40506, Cars, Trucks, and Climate: EPA
Regulation of Greenhouse Gases from Mobile Sources, by James E. McCarthy and Brent D. Yacobucci.
11
Utility Air Regulatory Group vs. Environmental Protection Agency, No. 12-1146, 2014 Westlaw 2807314 (U.S. June
23, 2014).
12
CO2-equivalents (CO2e) result from weighting the mass of emissions of a GHG (e.g., methane, sulfur hexafluoride,
etc.) by its effect, relative to the effect of CO2, on radiative forcing of the climate system over a specified time period
(usually 100 years). Using this method, gases of different atmospheric lifetimes and potencies can be compared or
added. Various assumptions affect the relative warming potential of different GHG compounds.
13
For a further discussion, see CRS Report R43795, U.S. Greenhouse Gas Emissions: Recent Trends and Factors, by
Jonathan L. Ramseur.
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In its 2014 Annual Energy Outlook, the U.S. Energy Information Administration (EIA) projected
emissions from electricity generation to rise 3.6% from 2012 to 2020, assuming no further
regulatory actions.14 EIA’s reference case projection would put electricity generation emissions at
12% below 2005 levels in 2020. Presumably, the EPA-proposed regulations for existing power
plants will lower any future EIA projections.
Figure 1. Percent Change in U.S. Greenhouse Gas (GHG) Emissions,
the Economy, and Population
80%
GDP (Inflation
Adjusted), +73%
Percentage Change from 1990 Baseyear
70%
60%
50%
40%
Population, +26%
30%
20%
CO2 , +5%
10%
U.S. Pledge:
17% below 2005,
3% below 1990
0%
Six GHGs, +5%
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
-10%
Source: CRS figure, using GHG emissions data from United States Environmental Protection Agency, The U.S.
Inventory of Greenhouse Gas Emissions and Sinks: 1990-2012, EPA 430-14-003, April 15, 2014; and GDP and
population data from U.S. Bureau of Economic Analysis, National Economic Accounts, “Table 7.1. Selected Per
Capita Product and Income Series in Current and Chained Dollars,” accessed May 27, 2014.
Note: GDP, or “gross domestic product,” is one measure of national economic activity.
14
U.S. Energy Information Administration (EIA), “Annual Energy Outlook 2014,” Table 18. Carbon Dioxide
Emissions by Sector and Source, May 7, 2014, http://www.eia.gov/forecasts/aeo/tables_ref.cfm.
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Statutory Authority
Q: Under what authority is EPA proposing these regulations?
A: EPA’s proposed regulations are required by CAA Section 111(d).15 This provision calls on
states to submit plans to EPA imposing “standards of performance” for pollutants emitted by
existing stationary sources. The Section 111(d) mandate applies narrowly, however. It applies
only when the pollutant (1) is neither covered by a National Ambient Air Quality Standard nor
listed as a “hazardous air pollutant” under CAA Section 112,16 and (2) would be regulated under a
“new source performance standard” (NSPS) under Section 111(b) if the existing source were a
new source. CO2 already meets precondition (1).17 CO2 will meet precondition (2) once EPA’s
proposed NSPS for CO2 emissions from fossil-fuel power plants are finalized, probably early next
year.
The trigger that requires EPA to use Section 111(d) is Section 111(b). Section 111(b) requires EPA
to issue NSPSs for any stationary source category on an EPA-maintained list of source categories
that “cause[], or contribute[] significantly to, air pollution which may reasonably be anticipated to
endanger public health or welfare.” Once an NSPS is promulgated—to reiterate, for new sources
in the source category—Section 111(d) is triggered for emissions of the same pollutant from
existing sources in the source category, if the preconditions described above are met.18 That is the
basis for EPA’s June 2014 proposal. The intersection between these two rules is addressed below.
15
42 U.S.C. §7411(d).
The CAA regulates emissions from stationary sources in multiple ways, three of which are relevant here. The first
way is by National Ambient Air Quality Standards, reserved for harmful but not extremely hazardous pollutants from
“numerous or diverse mobile or stationary sources.” CAA §108(a)(1)(B); 42 U.S.C. §7408(a)(1)(B). NAAQSs are
implemented by source-specific emission limits imposed by states in “state implementation plans.” CAA §110; 42
U.S.C. §7410. The second way is by federally prescribed national emission standards for hazardous air pollutants, that
is, particularly harmful pollutants. CAA §112; 42 U.S.C. §7412. And the third, of interest here, is by federally
prescribed standards of performance for new stationary sources. CAA §111; 42 U.S.C. §7411.
17
There is an alternate reading of this precondition, owing to the fact that in the 1990 amendments to the CAA,
inconsistent House and Senate amendments to Section 111(d) were enacted. Under the House amendment, Section
111(d) standards of performance are barred for air pollutants “emitted from a source category ... regulated under
Section 112” (emphasis added), the section covering hazardous air pollutants. Because fossil-fuel power plants are
indeed a source category regulated under Section 112, this argument concludes that Section 111(d) does not allow EPA
to restrict GHG emissions from existing such plants. The Senate amendment, on the other hand, places off limits only
air pollutants, rather than source categories, regulated under Section 112. GHGs are not regulated under Section 112,
so the Senate amendment poses no obstacle to EPA’s June 2 proposal.
EPA’s Legal Memorandum accompanying the June 2 proposed regulations explains that the agency has adopted a
hybrid of the House and Senate amendments under which use of Section 111(d) is barred for air pollutants that are both
regulated under Section 112 and emitted from a source category regulated under Section 112. Because CO2 emitted by
fossil fuel-fired power plants satisfies only the second of these triggers for exclusion, EPA believes that the June 2
proposal’s invocation of Section 111(d) is proper.
18
See, e.g., American Elec. Power Co., Inc. vs. Connecticut, 131 S. Ct. 2527, 2537 (2011).
16
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Q: How is the term “standards of performance,” required by Section 111(d),
defined in statute and case law?
A: The act defines “standard of performance” as
a standard for emissions of air pollutants which reflects the degree of emission limitation
achievable through the application of the best system of emission reduction which (taking
into account the cost of achieving such reduction and any nonair quality health and
environmental impact and energy requirements) the Administrator determines has been
adequately demonstrated.19
This definition makes clear that EPA’s main task is to define the “best system of emission
reduction,” considering the indicated factors, on which the standard for emissions will be based.
Most of the terms in the definition are themselves undefined in the act, leaving wide latitude for
EPA interpretation.20 This wide latitude is important in part because CAA Section 111 applies the
phrase “standard of performance” to both new and existing facilities in the listed source category,
yet is generally assumed to be more flexible and less stringent when applied to existing sources,
reflecting implementation challenges in existing facilities compared to new ones. Supporting this
assumption is that certain definition terms—such as “best,” “taking into account cost,” and
“adequately demonstrated”—seem to accommodate comfortably the different technological and
economic circumstances of existing facilities versus new ones. It should also be noted that
Section 111(d) itself says that states may consider an existing facility’s remaining useful life
“among other factors.”
Although all of the court interpretation of the CAA’s definition of “standard of performance”
stems from the phrase’s use for new stationary sources, the cases arguably still shed light on how
the definition might apply under Section 111(d) to the standards of performance that states are
required to submit for existing sources. A full review of this case law is beyond the scope of this
report. (EPA recently has offered its own, however.)21 However, in light of ubiquitous claims that
Section 111(d) affords EPA great flexibility as to what it may accept in state plans, it is worth
keeping in mind that whatever states submit must, as Section 111(d) explicitly requires, include
“standards of performance.” That means that EPA’s calculation of each state-specific emissionreduction goal must be based on measures that are “system[s] of emission reduction.”22 Whether
some of the “building blocks” EPA proposed in June 2014 as components of a system of emission
reduction—such as boosting use of renewable fuels, reducing electricity demand, and investing in
“smart grid” technology—constitute “systems of emission reduction” is not clear.
19
CAA §111(a)(1); 42 U.S.C. §7411(a)(1).
The term “air pollutant” is defined in CAA Section 302 and, important here, has been held by the Supreme Court,
with specific reference to Section 111, to include GHGs. American Elec. Power, 131 S. Ct. at 2537.
21
EPA’s legal interpretation of “standard of performance” can be found in three places: (1) the preamble to the
agency’s proposed rule for new power plants: Standards of Performance for Greenhouse Gas Emissions from New
Stationary Sources: Electric Utility Generating Units, 79 Federal Register 1430, 1462-1467 (January 8, 2014); (2) the
preamble to the June 2 proposed rule; and (3) an EPA-prepared Legal Memorandum accompanying the June 2
proposed rule, available at http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technicaldocuments. See, e.g., Essex Chemical Corp. vs. Ruckelshaus, 486 F. 2d 427, 433 (D.C. Cir. 1973) (to be “adequately
demonstrated,” the “system of emission reduction” must be “reasonably reliable, reasonably efficient, and reasonably
expected to serve the interests of pollution control without becoming exorbitantly costly in an economic and
environmental way”).
22
42 U.S.C. §7411(a)(1).
20
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The shorthand for this flexibility issue that EPA faces is whether the state-specific emissionreduction goals EPA prescribes must be based solely on measures taken “inside the fence line” of
specific plants, or whether “outside the fence line” measures can be considered part of a system
of emission reduction.
Finally, the emission standards prescribed in EPA’s June 2014 proposal must be based on state
approaches that are not only “system[s] of emission reduction,” but also the “best” of such
systems, considering the factors in the standard of performance definition.23 Case law holds that
EPA has “broad discretion” to weigh these factors.24
Q: When has EPA previously used this authority?
A: EPA has only promulgated rules under Section 111(d) a handful of times. Excluding guideline
documents for incineration facilities, which rely in large part on a different section of the act, the
Code of Federal Regulations contains only two Section 111(d) guideline documents.25
EPA’s most recent attempt to use the authority was in the Clean Air Mercury Rule (CAMR,
2005), when EPA promulgated standards for mercury emissions from new power plants under
Section 111(b) and set up a cap-and-trade system under Section 111(d) for existing power plants.
In the final CAMR rule,26 EPA apportioned a nationwide budget for mercury emissions among
individual states. Each state was required to submit an implementation plan to EPA within 18
months of the rule’s promulgation, detailing the controls it would impose on the coal-fired power
plants within the state to meet the state’s emissions budget. States could adopt EPA’s emissions
trading rule or choose to achieve the mandated reductions in some other way. If a state did
neither, the cap-and-trade program outlined in CAMR was proposed as a Federal Implementation
Plan (FIP). EPA set state-level budgets for a period beginning in 2010 (four and a half years after
promulgation), and for a second period beginning in 2018.
The D.C. Circuit Court of Appeals vacated CAMR’s 111(b) standards for new power plants in a
2008 decision,27 so these 111(d) guidelines for existing power plants were never implemented.
The court did not rule on whether the flexible approach taken by EPA for mercury controls (i.e., a
cap-and-trade system) met the requirements of Section 111(d).
The most recent successful use of Section 111(d) came in 1996, when EPA used the authority to
impose requirements on emissions of methane and non-methane organic compounds from
landfills.28 These regulations required the use of control equipment and set numeric emission
23
Ibid.
Sierra Club vs. Costle, 657 F.2d 298, 321 (D.C. Cir. 1981). Accord, Lignite Energy Council vs. U.S. EPA, 198 F.3d
930, 933 (D.C. Cir. 1999).
25
The two guideline documents in the C.F.R. are “Emission Guidelines and Compliance Times for Municipal Solid
Waste Landfills,” at 40 C.F.R. 60.30c, and “Emission Guidelines and Compliance Times for Sulfuric Acid Production
Units,” at 40 C.F.R. 60.30d. EPA also appears to have issued four guideline documents that do not appear in the C.F.R.
26
U.S. EPA, Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating
Units, Final Rule, 70 Federal Register 28606, May 18, 2005.
27
New Jersey vs. EPA, 517 F.3d 574 (D.C. Cir. 2008). The court found that EPA was obligated to promulgate
standards for mercury and other hazardous air pollutants under Section 112 of the act, and therefore vacated the NSPS
under Section 111(b).
28
U.S. EPA, Standards of Performance for New Stationary Sources and Guidelines for Control of Existing Sources:
Municipal Solid Waste Landfills, Final Rule, 61 Federal Register 9905, March 12, 1996.
24
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limits for designated facilities (large landfills), with a compliance deadline of 30 months after the
effective date of the state plan submitted to EPA. State plans were required to be submitted within
nine months of promulgation of the Section 111(d) rule.
Q: Why has Section 111(d) been infrequently used?
A: As mentioned earlier, Section 111(d) can be used only for pollutants that are neither criteria
pollutants (i.e., EPA has not set National Ambient Air Quality Standards for them under Section
109 of the act) nor hazardous air pollutants (HAPs), as identified in Section 112 of the act.29 This
is a relatively small number of pollutants. CO2, being neither a criteria pollutant nor a HAP, falls
into that universe.30
Q: What relationship does this proposal have to EPA’s January 2014 proposal
of GHG standards for new fossil-fueled power plants?
A: EPA’s January 2014 proposal for new fossil-fuel power plants was made under CAA Section
111(b). As discussed earlier, once EPA sets such a New Source Performance Standard under
Section 111(b), Section 111(d) is triggered for existing sources in the same source category if the
pollutant in question is neither covered by a NAAQS nor listed as a hazardous air pollutant.31 CO2
satisfies this precondition, so EPA’s January 2014 proposal for new power plants, once made
final, will obligate the agency and the states to regulate CO2 emissions from existing fossil-fueled
power plants.
Those likely to be regulated under Section 111(d) presumably are well aware of the 111(b)-111(d)
linkage—no 111(b) NSPS means no 111(d) standards of performance for existing sources in the
same category. Thus, even though the January 2014 proposal of NSPSs for new power plants will
affect very few plants, it is nearly certain that once finalized, the rule will be vigorously
challenged in court by utilities operating existing power plants potentially subject to the June
2014 proposal under Section 111(d).
Q: Is the rule released on June 2, 2014, a final rule?
A: No. It is a proposed rule, on which EPA took public comment through December 1, 2014.
Under Section 307(d) of the CAA,32 EPA is required to issue a proposed rule and hold a public
comment period before issuing a final rule. The final rule may be changed from the proposal, so
long as EPA provides an explanation in the Federal Register of the reasons for any major
changes. At the least, when the agency promulgates a final version of the rule, it must provide a
response to each of the significant comments, criticisms, and new data submitted during the
proposed rule’s public comment period.
29
But see footnote 17 above.
See also the first question under “Statutory Authority,” above.
31
However, see footnote 17above.
32
42 U.S.C. §7607(d).
30
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The Proposed Rule
Q: By how much would the proposed rule reduce CO2 emissions?
A. EPA’s proposed Section 111(d) rule does not set a future level of emissions from existing
electricity generators. The proposal sets state goals for emission rates—as pounds of CO2
emissions per megawatt-hour of electricity produced—not absolute emissions. It has been widely
reported that the rule would require a 30% reduction in CO2 emissions from the electricity sector
by 2030, compared to the level of emissions in 2005; but this is simply EPA’s estimate of the
rule’s effect nationwide, not what the rule requires.
Effects on CO2 emissions are calculated by computer models projecting the quantity of electricity
produced by each state under the rule, multiplied by EPA’s proposed state emission-rate goals.
The actual emissions in the future will depend on how states choose to comply with the
promulgated rule and how much electricity is generated (and at what type of generation units).
In 2012, CO2 emissions from electricity generation were 2,023 million metric tons (mmt), or
about 38% of total U.S. CO2 emissions (excluding emissions and removals by land use and
forestry).33 EPA projects that the proposed Section 111(d) rule, Option 1—State Compliance,
would reduce CO2 emissions from electricity generation to 1,682 mmt when states reach their
“final” emission rate goals in 2030. This would be an approximate absolute emissions reduction
of 17% from 2012 levels, the base year for the proposed rule, and about 30% below the 2005
level of CO2 emissions from U.S. electricity generation.34 EPA’s modeling of the rule also
estimates interim reductions, as illustrated in Figure 2.
The 2030 “final goals” for states’ emissions rates would continue as long as the rule remains in
place. As Figure 2 illustrates, absolute CO2 emissions from electricity generation would likely
increase after 2030 at the rate of growth of electricity production (unless very low- or no-emitting
fuels make going beyond the emissions rate standard economically attractive).
Q: Did EPA propose more than one option for the standards?
A: EPA proposed only one set of emission rate standards (labeled Option 1 in the proposal), but it
asked for comment on an alternative set (labeled Option 2) in which the final state goals would be
less stringent and would have to be attained more quickly—by 2025, five years earlier than under
Option 1.
Besides offering an alternative option for comment, the agency also identified two ways in which
states could comply with either the proposed standards or the alternative: a State Compliance
Approach or a Regional Compliance Approach. The goals would be the same for the two
compliance approaches. Under the State Compliance Approach, each state would pursue its goal
on its own—as is typically the case in CAA State Implementation Plans. However, under the
33
U.S. Environmental Protection Agency, The U.S. Inventory of Greenhouse Gas Emissions and Sinks: 1990-2012,
Washington, DC: 2014.
34
The base year for the proposed rule is 2012, although some have reported it as 2005. The comparison with emissions
in 2005 may be relevant because of President Obama’s pledge in 2009 to reduce total U.S. GHG emissions 17% below
the 2005 level by 2020.
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Regional Approach, states voluntarily could join with other states to implement multistate
compliance approaches (e.g., maintaining the nine-state cap-and-trade system under the Regional
Greenhouse Gas Initiative). Under the Regional Compliance Approach, states would have
additional time to submit implementation plans, and the costs and benefits of compliance are
estimated by EPA to be somewhat lower than under the State Compliance Approach.
Because it serves as the base of EPA’s proposal, in the remainder of this report, we generally
focus on the Option 1—State Compliance Approach.
Figure 2. U.S. CO2 Emissions from Electricity Generation, Historical and Projected
Source: CRS figure from U.S. Environmental Protection Agency, The U.S. Inventory of Greenhouse Gas Emissions
and Sinks: 1990-2012, Washington, DC: 2014; and EPA spreadsheet “Illustrative State compliance scenario for
Option 1,” available at http://www.epa.gov/airmarkets/powersectormodeling/cleanpowerplan.html.
Note: EPA-projected emissions converted from short tons to metric tons by CRS.
Q: What is the range of state emission-rate goals?
A: The proposal sets interim emission-rate goals for each state for the period from 2020 to 2029
and a final goal for 2030. The proposed 2030 goals range from 215 pounds of CO2 per megawatthour in Washington State to 1,783 pounds in North Dakota. In general, states that rely on coal for
a high percentage of their total power generation would be allowed higher emission rates than
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states that rely more heavily on natural gas, nuclear, and renewable power. Table 1 shows the
final (2030) goals for each state in alphabetical order.
The data presented here are based on the agency’s proposed approach. The agency also asked for
comment on an alternative option that would shorten the compliance period from 10 years to 5
(i.e., a final goal reached in 2025), with a less stringent set of CO2 emission rates. Under both the
proposed and alternative options, the agency also proposes to allow submission of multistate
plans, the effects of which might differ slightly from the single-state approach.
Q: How did EPA establish the state-level goals in the proposed rule?
A: EPA describes the rule as having four “building blocks,” which were used to generate statespecific emission rate goals. The first of these calls for “heat-rate” (i.e., efficiency) improvements
at coal-fired, steam power plants (i.e., reductions in the amount of heat, as measured in Btus,
necessary to generate a megawatt-hour of electricity). Since CO2 emissions are directly related to
the amount of coal burned, a reduction in the heat rate of a given percentage would lead to a
reduction in CO2 emissions of the same percentage. For each state’s coal-fired power plants, the
agency began by determining an average CO2 emission rate (in pounds of CO2 per megawatthour), using data for 2012. Based on its review of relevant engineering studies and emissions
data, EPA determined that coal-fired plants could reasonably be expected to reduce their average
heat rate by 6%, so the agency reduced each state’s 2012 CO2 emission rate from coal-fired units
by that percentage. For example, if a state’s coal-fired power plants averaged 2,000 pounds of
CO2 emissions per megawatt-hour in 2012, the first building block would lower the state’s
average emission rate for those coal-fired units to 1,880 pounds per megawatt-hour. A decreased
average rate at a state’s coal-fired units would contribute toward a decrease in the state’s overall
emission rate.
The second building block is based on “dispatch changes” among a state’s electric generating
units (EGUs). As demand for power rises over the course of a day, the system operator or regional
transmission organization calls into service (“dispatches”) additional generating units. As demand
decreases in the evening, these additional units are taken off-line. The same principle applies as
demand fluctuates over the course of a year. Because coal-fired plants take hours or days to ramp
up to their design capacity, and because they have traditionally been cheaper to operate than most
other sources, they have tended to be dispatched before natural-gas-fired units. In the last five
years, this order of dispatch has been changing, however, and the rule would set a goal of
increasing the dispatch of natural-gas-combined-cycle (NGCC) plants, which have lower CO2
emissions per megawatt-hour generated, in place of higher emission coal- and oil-fired power.35
The agency estimated that, in aggregate, NGCC units used about 46% of their total generating
capacity in 2012. EPA determined that this NGCC capacity use could be increased to 70%. For
goal-setting purposes, the second building block assumes that a state’s NGCC plants will, in
aggregate, use up to 70% of their capacity, rather than the current averages, which range from 1%
in South Dakota to 63% in Connecticut. The additional NGCC power is assumed to replace a
portion of the state’s coal-fired and other higher CO2 emitting sources, thus reducing the rate of
CO2 emissions per megawatt-hour generated.
35
According to EPA, NGCC units can produce as much as 46% more electricity from a given input of Btus than coalfired steam EGUs.
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The third building block assumes the use of additional low- or no-carbon emitting power sources,
principally renewable energy. To estimate how much power could be expected to come from
renewable sources, EPA grouped the states into six regions and developed state-specific goals
based on the average of existing renewable portfolio standards36 applicable in 2020 in each
region. The agency used these averages to compute regional growth factors for renewable
electricity, which it applied to each state’s initial (2012) renewable energy generation level. This
additional electricity from zero-emission energy sources lowers the states’ CO2 emission rates.
Building block 3 also includes adjustments for “at-risk” and “under construction” nuclear power.
The “at-risk” nuclear power, which exists in 30 states, was factored into both the state 2012
baseline emission rates and the emission rate targets, creating an incentive for states to maintain
their existing nuclear generation. In addition, EPA added projected electricity generation from
nuclear power units that are currently under construction in three states.37
The fourth building block reduces the emissions rate by including demand-side energy efficiency
programs. Although some states currently have more stringent energy efficiency requirements
than others, EPA assumes that by 2030, all states can implement such programs, with roughly
similar results. These programs are assumed to reduce electricity generation by roughly 9% to
12% in each state by 2030.
For an example of how these building blocks were used to produce a state emission-rate goal, see
EPA’s “Goal Computation Technical Support Document” at http://www2.epa.gov/sites/
production/files/2014-05/documents/20140602tsd-goal-computation.pdf. For additional
discussion, see CRS Report R43652, State CO2 Emission Rate Goals in EPA’s Proposed Rule for
Existing Power Plants, by Jonathan L. Ramseur.
Table 1 provides each state’s 2012 emission rate baseline, 2030 emission rate target, and the
percentage reduction from the 2012 baseline.
Table 1. State CO2 Emission Rate Baseline (2012) and Emission Rate Goal (2030)
Pounds of CO2 emitted per net megawatt-hour of electricity generated
State
2012 Emission Rate
Baseline
2030 Emission Rate
Goal
Percentage Reduction
from 2012 Baseline
Alabama
1,444
1,059
27%
Alaska
1,351
1,003
26%
Arizona
1,453
702
52%
Arkansas
1,634
910
44%
California
698
537
23%
Colorado
1,714
1,108
35%
36
Renewable portfolio standards, adopted by about 29 states and the District of Columbia (as of March 2013), require
retail electricity suppliers to supply a minimum percentage or amount of their retail electricity load with electricity
generated from eligible sources of renewable energy, as defined by the state. For additional information, see the
Database of State Incentives for Renewables and Efficiency, at http://www.dsireusa.org/.
37
EPA identified five nuclear units under construction in Georgia, South Carolina, and Tennessee, and 5.7 gigawatts of
nuclear units (about 6% of the nation’s nuclear capacity) at risk of retirement.
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2012 Emission Rate
Baseline
2030 Emission Rate
Goal
Percentage Reduction
from 2012 Baseline
Connecticut
765
540
29%
Delaware
1,234
841
32%
Florida
1,199
740
38%
Georgia
1,500
834
44%
Hawaii
1,540
1,306
15%
Idaho
339
228
33%
Illinois
1,894
1,271
33%
Indiana
1,924
1,531
20%
Iowa
1,552
1,301
16%
Kansas
1,940
1,499
23%
Kentucky
2,158
1,763
18%
Louisiana
1,455
883
39%
Maine
437
378
14%
Maryland
1,870
1,187
37%
925
576
38%
Michigan
1,690
1,161
31%
Minnesota
1,470
873
41%
Mississippi
1,093
692
37%
Missouri
1,963
1,544
21%
Montana
2,246
1,771
21%
Nebraska
2,009
1,479
26%
Nevada
988
647
34%
New Hampshire
905
486
46%
New Jersey
928
531
43%
New Mexico
1,586
1,048
34%
New York
978
549
44%
North Carolina
1,647
992
40%
North Dakota
1,994
1,783
11%
Ohio
1,850
1,338
28%
Oklahoma
1,387
895
35%
Oregon
717
372
48%
Pennsylvania
1,531
1,052
31%
Rhode Island
907
782
14%
South Carolina
1,587
772
51%
South Dakota
1,135
741
35%
Tennessee
1,903
1,163
39%
State
Massachusetts
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State
2012 Emission Rate
Baseline
2030 Emission Rate
Goal
Percentage Reduction
from 2012 Baseline
Texas
1,284
791
38%
Utah
1,813
1,322
27%
Virginia
1,302
810
38%
Washington
756
215
72%
West Virginia
2,019
1,620
20%
Wisconsin
1,827
1,203
34%
Wyoming
2,115
1,714
19%
Source: Prepared by CRS using data from EPA’s technical support document (“Clean Power Plan Proposed
Rule: Goal Computation”) and accompanying spreadsheet.
Notes: Because Vermont and the District of Columbia lack affected sources, no goals were proposed for these
jurisdictions. The emission rate goals for three areas of Indian country and two U.S. territories are discussed
below.
Q: Would states and companies that have already reduced GHG emissions
receive credit for doing so?
A: States do not receive “credit” in their goals for emission reduction measures already taken.
Whether individual power companies will receive credit will be decided by states as they develop
their implementation plans. The rule requires each state to submit an implementation plan to EPA
that identifies what measures/regulations the state will implement to reach its goal.
EPA used 2012 data to prepare each state’s emission rate goals. The proposed rule does not have a
process for providing credit for emissions reductions made prior to 2012. However, EPA points
out that states that began action prior to 2012, including a shift to less carbon-intensive energy
sources or energy efficiency improvements, will be “better positioned” to meet state-specific
emission rate goals.38
In addition, a few states with high percentages of renewable power in their total power supply do
effectively receive credit for the levels of renewable power already achieved, because a state’s
interim and final emission rate goals are based in part on the amount of renewable power
expected in the region to which it belongs. If a state’s current renewable generation percentage
exceeds its regional percentage target, EPA’s goal calculation methodology assumes the state
would adjust its renewable energy generation to match the regional target. For example, Iowa,
South Dakota, Minnesota, and Maine all have renewable energy goals calculated by EPA that are
lower than their 2012 generation levels. Assuming these states continue to use renewable energy
at their 2012 levels, the renewable energy building block would effectively give them credit for
early action.
38
79 Federal Register 34918.
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Q: How does EPA’s proposed rule interact with existing GHG emission
reduction programs in the states, namely the Regional Greenhouse Gas
Initiative and California’s cap-and-trade system?
A number of U.S. states have taken action requiring greenhouse gas (GHG) emission reductions.
The most aggressive actions have come from a coalition of states from the Northeast and MidAtlantic regions—the Regional Greenhouse Gas Initiative39—and California.40
The Regional Greenhouse Gas Initiative (RGGI) is a cap-and-trade system involving nine states
that took effect in 2009.41 RGGI applies to CO2 emissions from electric power plants with
capacities to generate 25 megawatts or more.
Pursuant to legislation passed in 2006, California established a cap-and-trade program that took
effect in 2013. California’s cap covers multiple GHGs and when fully implemented in 2015 will
apply to multiple sectors, covering approximately 85% of California’s GHG emissions.
Although EPA’s proposed rule measures state compliance in terms of a CO2 emissions rate, EPA
allows states considerable flexibility in terms of meeting its emissions rate goals. For example,
states can establish new programs to meet their goals or use existing programs and regulations.
Moreover, states can meet their goals individually or collaborate with other states to create (or use
existing) multistate plans. EPA provides states with additional time to submit their plans if states
decide to combine their efforts.
It is uncertain whether the scope and stringency of the RGGI program or the California system
would be sufficient to meet the targets in EPA’s proposed rule. In particular, the emission caps in
both programs do not go beyond 2020.
Q: What role is there for “outside-the-fence” emission reductions?
A: The role of “outside-the-fence” emission reductions will depend on the policies and
requirements states use to meet their emission rate targets. In setting the goals for each state, EPA
clearly anticipated that some reductions will come from actions taken by actors other than power
companies or specific EGUs (actions that have been referred to as “outside-the-fence”
reductions). For example, one of the four building blocks of the proposed rule is the application
of demand-side energy efficiency measures, such as the installation of more efficient lighting
products, better insulation, and more efficient electric appliances. In the Preamble to the proposed
rule, EPA states its intention to establish a “toolbox of decision support resources” for the states,
which will include outside-the-fence measures such as energy efficiency and renewable energy
policies and programs.42
39
See CRS Report R41836, The Regional Greenhouse Gas Initiative: Lessons Learned and Issues for Policy Makers,
by Jonathan L. Ramseur.
40
In addition, EPA notes that 38 states have renewable portfolio standards or goals, and utilities in 47 states have
demand-side energy efficiency programs. See Preamble to the proposed rule, at 79 Federal Register 34835.
41
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont.
New Jersey participated in the program from 2009 through the end of 2011.
42
79 Federal Register 34928.
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Q: Does EPA’s proposal allow states to convert their emission rate targets into
mass-based, emission targets?
A: EPA’s proposed rule allows states to convert their emission rate targets (lbs. of CO2 per MWh)
into mass-based emission targets (lbs. or metric tons of CO2). When EPA issued its proposal, the
agency published a technical support document (“Projecting EGU CO2 Emission Performance in
State Plans”) that provided one option for converting from rate-based to mass-based targets. After
receiving feedback from states about the conversion process, EPA provided additional
information in November 2014,43 including a new technical support document: “Translation of
the Clean Power Plan Emission Rate‐Based CO2 Goals to Mass‐Based Equivalents.”44
The new document describes two approaches states can use to convert their emission rate targets
to mass-based targets. The first approach is based on historical emissions from existing sources.
The second is based on historical emissions from existing sources and projected emissions from
existing and new sources.45 With each approach, EPA prepared state-specific mass-based targets,
which, according to EPA, “could be considered equivalent to the proposed rate-based goals.”46
Table 2 lists the state-specific, mass-based targets (2030) that EPA prepared using both
approaches and compares these targets to each state’s 2012 CO2 emission baseline.
Table 2. EPA’s Conversion of CO2 Emission Rates to Mass-Based Emission Targets
2012 CO2 Emission Baseline Compared to 2030 CO2 Emission Targets—Alphabetical by State
State
2012 CO2 Emission
Baseline
2030 CO2 Emission Goal
(Existing Sources)
2030 CO2 Emission Goal
(Existing and New Sources)
Alabama
68,558
50,267
59,214
Alaska
1,963
1,457
1,912
Arizona
36,709
17,734
24,193
Arkansas
36,095
20,096
23,527
California
43,688
35,805
45,171
Colorado
38,442
25,335
31,935
Connecticut
6,038
4,265
4,661
Delaware
4,363
2,972
3,435
Florida
107,509
68,221
83,259
Georgia
57,017
31,676
42,394
43
U.S. EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and
U.S. Territories; Multi-Jurisdictional Partnerships,” Notice of additional information, 79 Federal Register 67406,
November 13, 2014.
44
Available at http://www2.epa.gov/sites/production/files/2014-11/documents/20141106tsd-rate-to-mass.pdf.
45
In its June 2014 proposal, EPA asked for comment on whether new, fossil-fuel fired sources could be included as a
component in a state plan (see 79 Federal Register 34923-34924).
46
79 Federal Register 67408.
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State
2012 CO2 Emission
Baseline
2030 CO2 Emission Goal
(Existing Sources)
2030 CO2 Emission Goal
(Existing and New Sources)
Hawaii
4,729
4,010
4,899
Idaho
638
468
990
Illinois
87,133
58,471
65,574
Indiana
91,831
73,090
79,341
Iowa
34,674
25,749
28,496
Kansas
31,156
24,081
26,696
Kentucky
82,893
70,203
81,953
Louisiana
44,186
26,823
32,839
Maine
1,629
1,323
1,432
Maryland
18,300
11,613
15,148
Massachusetts
11,910
7,414
8,204
Michigan
63,164
43,403
46,725
Minnesota
25,416
14,474
17,218
Mississippi
23,500
16,449
18,916
Missouri
70,926
55,792
60,173
Montana
16,266
12,828
15,190
Nebraska
24,639
18,142
20,233
Nevada
14,049
9,209
11,396
New Hampshire
4,212
2,262
2,392
New Jersey
11,774
6,741
8,649
New Mexico
15,730
10,391
13,337
New York
31,441
17,649
19,310
North Carolina
53,169
36,918
45,165
North Dakota
30,274
27,069
28,270
Ohio
92,861
68,751
75,116
Oklahoma
47,859
30,892
35,127
Oregon
6,956
3,614
5,293
Pennsylvania
105,184
72,272
79,618
Rhode Island
3,389
2,924
3,074
South Carolina
32,565
15,816
22,014
South Dakota
3,018
1,602
2,000
Tennessee
37,410
22,837
32,992
Texas
220,740
135,937
158,775
Utah
27,961
20,384
24,165
Virginia
24,914
18,923
24,494
Washington
6,617
2,862
4,772
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2012 CO2 Emission
Baseline
2030 CO2 Emission Goal
(Existing Sources)
2030 CO2 Emission Goal
(Existing and New Sources)
West Virginia
65,614
52,636
54,566
Wisconsin
38,390
25,275
28,102
Wyoming
45,358
37,590
39,550
State
Source: Prepared by CRS using data from EPA’s technical support document (“Translation of the Clean Power
Plan Emission Rate-Based CO2 Goals to Mass-Based Equivalents”) and accompanying spreadsheet (November
2014).
Notes: Because Vermont and the District of Columbia lack affected sources, no goals were proposed for these
jurisdictions. In the November 2014 support document, the agency also provided mass-based equivalents for
three areas of Indian country—the Navajo Nation, the Ute Tribe of the Uintah and Ouray Reservation, and the
Fort Mojave Tribe—and two U.S. territories—Guam and Puerto Rico.
Q: Would EPA’s rulemaking require states to reduce their emission rates
in 2020?
A: In the building block formula that EPA used to establish state-specific emission rate targets
(both interim and final), the agency prepared state emission rates for each year, starting in 2020
and ending in 2029. These rates are available in a technical support document spreadsheet.47
Although states are not specifically required to meet the 2020-2029 annual emission rates, states
would likely need to reduce their emission rates on a pathway that is similar to these annual
emission rates, because the state-specific interim targets (2029) were constructed by taking the
average of the 2020-2029 annual emission rates.
For this reason, some stakeholders have characterized EPA’s proposed CO2 emission rate targets
for existing power plants as “front-loaded,” with a disproportionate percentage of emission rate
reductions required in the early years of the program (2020-2024). For further discussion, see
CRS Insight IN10172, EPA’s Clean Power Plan Proposal: Are the Emission Rate Targets FrontLoaded?, by Jonathan L. Ramseur.
Q: How would new fossil-fuel fired power plants and their resulting
electricity generation and emissions factor into a state’s emission rate
calculations?
A: In general, EPA’s June 2014 proposed rule addresses “affected EGUs [electric generating
units],” which include fossil fuel-fired units that were in operation or had commenced
construction as of January 8, 2014, have a generating capacity above a certain threshold, and sell
a certain amount of their electricity generation to the grid. As discussed above, newly constructed
power plants would likely be subject to the New Source Performance Standard proposed by EPA
in January 2014.48
47
See EPA, Technical Support Document, Clean Power Plan Proposed Rule: Goal Computation, and accompanying
spreadsheet, at http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.
48
U.S. EPA, “Standards of Performance for Greenhouse Gas Emissions From New Stationary Sources: Electric Utility
Generating Units,” Proposed rule, 79 Federal Register 1430, January 8, 2014.
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However, in its June 2014 proposal for existing power plants, EPA discussed potential ways in
which certain types of fossil-fuel fired units, built after January 2014, could interact with the
states’ emission rate targets. For example, EPA did not include the construction of new NGCC
units as part of its emission rate methodology, but the agency sought comment on whether states
could include new NGCC units in their emission rate calculations. Considering the legal structure
of CAA section 111(d), EPA stated: “should the calculation consider only the emission reductions
at affected EGUs, or should the calculation also consider the new emissions added by the new
NGCC unit, which is not an affected unit under section 111(d)?”49
In addition, EPA solicited comments on whether incremental emission reductions from new fossil
fuel-fired boilers and integrated gasification combined cycle (IGCC) units with carbon capture
and sequestration should be allowed as a compliance option to help meet the emission rate
targets.
Q: What role does nuclear power play in EPA’s proposal?
A: EPA’s emission rate methodology accounts for “at-risk” nuclear power and “underconstruction” nuclear power. Using projections from the Energy Information Administration, EPA
determined that 5.8% of total U.S. nuclear power capacity was at risk of being retired in the near
future.50 The “at-risk” nuclear power, which exists in 30 states, was factored into the 2012
baseline emission rates and the emission rate targets (via building block 3, discussed above).
Including the “at-risk” generation in the baseline and the emission target creates an incentive for
states to maintain their “at-risk” nuclear generation: If a state were to retire some portion of its
“at-risk” nuclear generation, the state’s emission rate would increase (all else being equal). Some
stakeholders have requested that EPA provide an incentive to maintain a higher percentage of
nuclear power generation.51
In addition, EPA’s emission rate methodology includes projected electricity generation from
nuclear power units that are currently “under construction.” EPA identified five such units at three
facilities in Georgia, South Carolina, and Tennessee. Including the estimated generation from
these anticipated units in the emission rate equation substantially lowers the emission rates of
these three states. If these anticipated units do not complete construction and enter service, these
states would likely have more difficulty achieving their emission rate goals. EPA specifically
asked for comments on the treatment of these under construction units.
EPA did not include the addition of new nuclear generation in the agency’s emission rate
methodology. However, EPA stated that “any additional new nuclear generating units or uprating
of existing nuclear units, relative to a baseline of capacity as of the date of proposal of the
emission guidelines, could be a component of state plans.”52
49
79 Federal Register 34924.
See EPA, Technical Support Document, GHG Abatement Measures.
51
See, e.g., Nuclear Energy Institute, Press Release, December 2, 2014, at http://www.nei.org.
52
79 Federal Register 34923.
50
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Q: What additional information did EPA provide in its October 2014 notice of
data availability?
A: EPA published a notice of data availability (NODA) in the Federal Register on October 30,
2014, providing additional information on several issues raised by stakeholders.53 EPA asked for
comments on the information presented to be provided by December 1, 2014, the same deadline
as the proposed rule.
The issues discussed in the NODA include the following:
•
the timing of the emission rate reduction requirements, particularly the reductions
related to electricity generation dispatch adjustments (i.e., building block 2);
•
how to account for newly constructed fossil-fuel fired power plants in a state’s
emission rate calculations;
•
the methodology for addressing renewable energy generation, particularly
interstate relationships that may involve one state taking credit for renewable
energy generation in another state; and
•
whether to account for reductions in electricity generation and emissions that
may result from increased generation in renewable energy (building block 3)
and/or reduced demand from energy efficiency impacts (building block 4).
Although EPA addressed many of these topics to some degree in its June 2014 proposed rule, the
NODA provides some of the alternative suggestions that EPA has received from various
stakeholders.
Q: Do EPA’s proposed emission rate targets apply to electric generating units
in U.S. territories and/or areas of Indian country?
A: EPA proposed emission rate targets for two U.S. territories (Guam and Puerto Rico) and three
areas of Indian country (the Navajo Nation, the Ute Tribe of the Uintah and Ouray Reservation,
and the Fort Mojave Tribe) in a supplemental proposal that was published in the Federal Register
on November 4, 2014.54 Table 3 lists the 2030 emission rate targets in comparison to the 2012
baseline emission rates.
Although EPA used the same building block calculations to generate emission rate targets for
these locations, the agency is seeking comment on different approaches and options for
calculating emission rates in both the territories and Indian areas. For example, EPA notes that
none of the territories or Indian tribes generated electricity from (non-hydroelectric) renewable
energy in 2012. Thus, applying the existing methodology in building block 3 would have no
effect on emission rates in these areas.
53
U.S. EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating
Units,” Notice of data availability, 79 Federal Register 64543, October 30, 2014.
54
U.S. EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and
U.S. Territories; Multi-Jurisdictional Partnerships,” Supplemental Proposed Rule, 79 Federal Register 65482,
November 14, 2014.
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In general, the U.S. territories are subject to the same implementation plan submission
requirements as the states. In contrast, tribes have “the opportunity, but not the obligation,” to
establish and submit a plan (after obtaining the necessary authority from EPA) to meet their
emission rate targets. If a tribe does not seek authority to submit its own plan, EPA is responsible
for establishing a plan, if the agency determines, at a later date, that “a plan is necessary or
appropriate.”55 In its November 2014 supplemental proposal, EPA did not include a proposal for a
“necessary and appropriate” determination and it did not propose a federal plan for any area of
Indian country.
Table 3. U.S. Territory and Indian Land CO2 Emission Rate Baseline (2012) and
Emission Rate Goal (2030)
Pounds of CO2 emitted per net megawatt-hour of electricity generated
U.S. Territory or
Area of Indian Land
2012 Emission Rate
Baseline
2030 Emission Rate
Goal
Percentage Reduction
from 2012 Baseline
Guam
1,948
1,586
19%
Puerto Rico
1,701
1,413
17%
858
855
>1%
Navajo Nation
2,121
1,989
6%
Ute Tribe
2,145
1,988
7%
Fort Mojave Tribe
Source: Prepared by CRS using data from EPA’s technical support document (“Clean Power Plan Supplemental
Proposal: Calculating Carbon Pollution Goals for Existing Power Plants in Areas in Indian Country and U.S.
Territories”) and accompanying spreadsheet.
Next Steps
Q: What are the next steps? How will EPA finalize this rule?
A: On June 2, 2014, EPA made the rule and various supporting materials available on its website.
The rule appeared in the Federal Register June 18, 2014. Publication in the Federal Register
began the formal comment period, which ran until December 1, 2014. As noted earlier, EPA held
four public hearings during the week of July 28, 2014 (in Atlanta, Denver, Pittsburgh, and
Washington, DC), as well as taking written comments on the regulations.gov website.56 EPA also
published three other documents in the Federal Register during the comment period and took
comment on them, as well:
•
a Notice of Data Availability, providing additional information on certain topics
raised by commenters on the June 2014 proposal—in particular, emission
reduction compliance trajectories created by the interim CO2 reduction goal for
55
79 Federal Register 65484.
The written submissions, transcripts of any public hearings, and all EPA supporting documents are available to the
public in a regulatory docket at http://www.regulations.gov. The docket number for this rule is EPA-HQ-OAR-20130602.
56
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2020 to 2029, aspects of EPA’s “building blocks” method, and how state-specific
CO2 reduction goals are calculated;57
•
emission guidelines for CO2 from existing fossil fuel-fired electric generating
units located in Indian country and U.S. territories;58 and
•
additional information regarding the translation of emission rate-based CO2 goals
to mass-based equivalents.”59
Now that the comment period has closed, EPA will consider the comments it received, revise the
rule to the extent it determines to be appropriate, and prepare additional supporting materials.
Then, upon completion of its internal consideration, the agency will forward a draft final rule to
the Office of Information and Regulatory Affairs (OIRA) at the White House Office of
Management and Budget.
Q: What role does OIRA (i.e., the White House) play in developing the
final rule?
A: OIRA/interagency review is a normal part of the rulemaking process for most federal
agencies. Under Executive Order (E.O.) 12866, OIRA oversees an interagency review process; it
also generally conducts meetings with principal stakeholders. These meetings are known as
“12866 meetings,” and OIRA posts information about them on its website.60
This interagency review process sometimes results in significant changes to a rule. At the least,
OIRA will seek to ensure that EPA has developed a rule that addresses concerns raised during the
comment period, that the rule is supported by the agency’s Regulatory Impact Analysis61 and any
other accompanying analyses, that the rule is legally defensible, and that the rule is consistent
with the President’s policy priorities.
Under E.O. 12866, OIRA reviews are to be completed within 90 days of a rule’s submission by
the regulatory agency, but often they extend for longer periods.62 This rule is not likely to
languish at OIRA, however. In directing EPA to develop the rule, in June 2013, the President
established a schedule for promulgation and implementation, directing EPA to promulgate a final
rule by June 1, 2015. Given the high priority placed on this rule by the President, both EPA and
OIRA are likely to make every effort to adhere to that schedule.
E.O. 12866 requires both regulatory agencies and OIRA to disclose certain information about
how OIRA’s regulatory reviews are conducted. Specifically, agencies are required to identify for
the public (1) the substantive changes made to rules between the draft submitted to OIRA for
review and the action subsequently announced and (2) changes made at the suggestion or
recommendation of OIRA. OIRA is required to provide agencies with a copy of all written
57
79 Fed. Reg. 64543, October 30, 2014.
79 Fed. Reg. 65481, November 4, 2014.
59
79 Fed. Reg. 67406, November 13, 2014.
60
See http://www.reginfo.gov.
61
Regulatory Impact Analyses, required under Executive Order 12866, provide an agency’s analysis of the expected
costs and benefits of a rule. See additional discussion under “Costs and Benefits of the Rule,” below.
62
Executive Order 12866, “Regulatory Planning and Review,” 58 Federal Register 51735, October 4, 1993. For an
electronic copy of this executive order, see http://www.whitehouse.gov/omb/inforeg/eo12866.pdf.
58
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communications between OIRA personnel and parties outside of the executive branch, and a list
of the dates and names of individuals involved in substantive oral communications.
After the completion of review, the EPA Administrator will sign the final rule and send it to the
Federal Register for promulgation.63
Q: When will the final rule take effect, and how will it be implemented?
A: Once finalized, major rules generally may take effect no sooner than 60 days after publication
in the Federal Register.64 Assuming that the final rule is signed June 1, 2015, it would likely be
effective sometime in the summer of 2015. According to the schedule announced by the
President, the states would then have until June 30, 2016, to submit plans detailing how they will
implement its provisions.
EPA has proposed some modifications to the schedule for the state plan submissions, however.
Under the proposed rule, states will be allowed to request an additional year for submission of a
complete plan, provided that they have taken “meaningful steps” toward completion by the 2016
deadline. States choosing to participate in a multistate plan would have until June 30, 2018, to
submit the plan.
Q: What happens if a state fails to submit an adequate plan by the
appropriate deadline?
A: EPA cannot compel a state to submit a Section 111(d) plan. Rather, should a state fail to
submit a satisfactory plan by EPA’s deadline, CAA Section 111(d) authorizes EPA to prescribe a
plan for the state. This authority is the same, Section 111(d) says, as EPA’s authority to prescribe
federal implementation plans (FIPs) when a state fails to submit a state implementation plan to
achieve a National Ambient Air Quality Standard (NAAQS).65 Questions have been raised as to
whether EPA has the authority to include in its EPA-promulgated plans all the measures, such as
demand-side energy efficiency requirements, that states may include in their 111(d) plans.
Costs and Benefits of the Rule
Q: What role will cost play in EPA’s choice of emission standards?
A: Under Section 111(a)(1)’s definition of “standards of performance,” EPA must consider cost in
developing the regulations. In addition, Section 111(d)(1) states, “Regulations of the
Administrator under this paragraph shall permit the State in applying a standard of performance
to any particular source under a plan submitted under this paragraph to take into consideration,
among other factors, the remaining useful life of the existing source to which such standard
applies.”
63
For additional discussion of OIRA’s role in the federal rulemaking process, see CRS Report RL32397, Federal
Rulemaking: The Role of the Office of Information and Regulatory Affairs, coordinated by Maeve P. Carey.
64
5 U.S.C. §801(a)(3)(A).
65
CAA §110(c); 42 U.S.C. §7410(c).
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EPA’s regulations implementing this language (40 C.F.R. 60.22(b)), which were promulgated in
1975 and 1989, provide additional detail:
(b) Guideline documents published [by EPA] under this section will provide information for
the development of State plans, such as:
(1) Information concerning known or suspected endangerment of public health or welfare
caused, or contributed to, by the designated pollutant.
(2) A description of systems of emission reduction which, in the judgment of the
Administrator, have been adequately demonstrated.
(3) Information on the degree of emission reduction which is achievable with each system,
together with information on the costs and environmental effects of applying each system to
designated facilities.
(4) Incremental periods of time normally expected to be necessary for the design,
installation, and startup of identified control systems.
(5) An emission guideline that reflects the application of the best system of emission
reduction (considering the cost of such reduction) that has been adequately demonstrated for
designated facilities, and the time within which compliance with emission standards of
equivalent stringency can be achieved. The Administrator will specify different emission
guidelines or compliance times or both for different sizes, types, and classes of designated
facilities when costs of control, physical limitations, geographical location, or similar factors
make subcategorization appropriate.
(6) Such other available information as the Administrator determines may contribute to the
formulation of State plans.
Q: What are EPA’s estimates of the costs of this rule?
A: EPA estimates the cost of the proposed rule at $7.3 billion to $8.8 billion annually in 2030.
Because states will determine how to comply with the goals established by the final rule, EPA
refers to these cost estimates as “illustrative” and notes that they “do not represent the full suite of
compliance flexibilities states may ultimately pursue.”66 EPA describes the cost estimate as
including “the net change in the annualized cost of capital investment in new generating sources
and heat rate improvements at coal steam facilities, the change in the ongoing costs of operating
pollution controls, shifts between or amongst various fuels, demand-side energy efficiency
measures, and other actions associated with compliance.”67
Although the rule may impose $7.3 billion to $8.8 billion in annual control costs by 2030, EPA
estimates that the average monthly residential electricity bill will decline by 9% in 2030, as
consumption of electricity declines due to efficiency measures.68
66
EPA, Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing Power Plants and
Emission Standards for Modified and Reconstructed Power Plants, June 2014, p. ES-7, at http://www2.epa.gov/sites/
production/files/2014-06/documents/20140602ria-clean-power-plan.pdf.
67
Ibid., p. ES-8 (footnote omitted).
68
Preamble to the proposed rule at 79 Federal Register 34934.
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Q: What are the benefits EPA estimates for the proposed Section 111(d) rule?
A: In the Preamble to the proposed rule, EPA cites monetized CO2-reduction benefits of the rule
to be $30 billion in 2030 (in 2011 dollars) and the health-related co-benefits of the rule to be an
additional $23 billion to $59 billion.69
In the accompanying Regulatory Impact Analysis, the agency provides additional detail,
including ranges of benefits based on a variety of assumptions. EPA’s estimates for Option 1—
State Compliance, in the Regulatory Impact Analysis range from $22 billion to $88 billion in
2020, rising to $36 billion to $150 billion in 2030.70 These estimates include benefits of slowing
climate change, as well as avoiding premature deaths and illnesses from other air pollution. With
estimated compliance costs of about $7.5 billion in 2020 rising to a maximum of $8.8 billion in
2030, EPA expects that its Section 111(d) proposal would yield net benefits of $26 billion to $50
billion in 2020, rising to $49 billion to $84 billion in 2030.71
EPA expects its Section 111(d) proposal to avoid some degree of greenhouse gas-induced climate
change, by directly reducing CO2 (the major human-related greenhouse gas), and by reducing
atmospheric concentrations of ozone, particulate matter, and other pollutants, all of which also
influence climate change. EPA estimates the benefits of reducing CO2 emissions (i.e., the climate
benefits, excluding the health-related co-benefits) to range from $5 billion to $52 billion in 2020,
rising to a range of $10 billion to $94 billion in 2030. The benefits of slowing climate change are
about 13% to 76% of the total monetized benefits of the proposed rule, depending on the
assumptions selected.
EPA calculated the benefits of avoided climate change by multiplying tons of CO2 emission
reductions in each year by corresponding ranges of “social costs of carbon” (SCC) in that year.
The SCC is an estimate of the avoided costs of future climate change per ton of CO2 avoided.
EPA uses the ranges of values published by an Interagency Working Group on the Social Costs of
Carbon in November 2013.72 Stakeholders have critiqued these SCC estimates, with some arguing
the range should be lower and others higher.
EPA expects that the 111(d) proposal simultaneously will reduce other air pollutants, avoid
premature deaths and illnesses, and reduce material damages. Under most assumptions, the
majority of monetized benefits EPA estimated for its proposal come from reductions, or “cobenefits” of pollutants other than CO2. EPA valued the co-benefits of its Section 111(d) proposal
at $24 billion to $62 billion in 2030.
69
This estimate is for Option 1—Regional Compliance, using a 3% discount rate, which reflects the preference of most
people to have money now rather than in the future. 79 Federal Register 34839.
70
All in 2011 dollars. These estimates are for EPA’s Option 1 proposal with state compliance, on which CRS focuses
as it best reflects the rule as proposed by EPA. Benefits for Option 2 and/or regional compliance would be slightly
lower, particularly because EPA estimates that the regional compliance alternative would achieve fewer emission
reductions. EPA, Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing Power Plants
and Emission Standards for Modified and Reconstructed Power Plants, June 2014, at http://www2.epa.gov/sites/
production/files/2014-06/documents/20140602ria-clean-power-plan.pdf.
71
Using the full range of benefits reported in the Regulatory Impact Analysis using several discount rates.
72
Interagency Working Group on Social Cost of Carbon, United States Government. Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis - Under Executive Order 12866.
Washington, DC: Office of Management and Budget, November 2013. http://www.whitehouse.gov/sites/default/files/
omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
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EPA did not quantify other expected co-benefits of this rule, including reduced exposures to
several hazardous air pollutants (such as mercury and hydrogen chloride), carbon monoxide, and
reduced direct exposures to sulfur dioxide (SO2) and nitrogen oxides (NOx). EPA also did not
quantify pollution effects on ecosystems or visibility.
Q: Under Section 111(d), are the benefits of the rule required to exceed its cost?
A: Section 111(d) does not impose a cost-benefit test. E.O. 12866, however, states that “in
choosing among alternative regulatory approaches, agencies should select those approaches that
maximize net benefits (including potential economic, environmental, public health and safety, and
other advantages; distributive impacts; and equity), unless a statute requires another regulatory
approach.”73
Congressional and Judicial Review
Q: Does the Congressional Review Act apply to the proposed rule?
A: The Congressional Review Act (CRA) provides a mechanism by which Congress may review
and disapprove of agency rules through passage of a joint resolution that is eligible for expedited
procedures in the Senate.74 If passed by both houses of Congress, such a joint resolution would be
sent to the President for his signature or veto.
It does not appear that the CRA applies to proposed rules issued by an agency. Arguably a
proposed rule does not satisfy the CRA definition of a “rule.”75 A proposed rule is not “designed
to implement, interpret, or prescribe law or policy”;76 instead, it is generally created by the
agency as a draft with which to solicit and receive public comments.77 Additionally, arguably a
proposed rule has no “future effect” because a proposed rule may not go into effect until
comments are received and considered by the agency and a final rule is published in the Federal
Register.78
The Government Accountability Office (GAO) specifically advises agencies not to submit
proposed rules to Congress or GAO under the CRA.79 In January 2014, Senator Mitch McConnell
requested80 that GAO analyze Congress’s authority to consider a CRA resolution disapproving of
EPA’s proposed rule entitled “Standards of Performance for Greenhouse Gas Emissions from
73
Ibid., Section 1.
5 U.S.C. §§801-808.
75
5 U.S.C. §804(3).
76
Ibid.; see 5 U.S.C. §551(4).
77
See 5 U.S.C. §553(b).
78
See 5 U.S.C. §553(c).
79
GAO, “Congressional Review Act (CRA) FAQs,” available at http://www.gao.gov/legal/congressact/cra_faq.html#6
(“[Question:] Should agencies submit proposed rules to GAO? [Answer:] No. Agencies should only submit major,
nonmajor, and interim final rules to GAO.”).
80
Letter from the Honorable Mitch McConnell to the Honorable Gene L. Dodaro, Comptroller General, Government
Accountability Office, January 16, 2014 [hereinafter McConnell GAO Letter].
74
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New Stationary Sources: Electric Utility Generating Unit.”81 In his letter, Senator McConnell
argued that this proposed rule was different from other proposed rules because a provision of the
CAA “gives immediate legal effect to the notice of proposed rulemaking.”82 GAO responded to
Senator McConnell’s letter in May 2014.
In its letter, GAO limited its analysis to three questions regarding GAO’s role in the CRA and its
precedents analyzing whether specific agency actions are rules under the CRA.83 It concluded that
“the terms of [the] CRA, and its supporting legislative history, clearly do not provide a role for
GAO with regard to proposed rules, and do not require agencies to submit proposed rules to
GAO.”84 Furthermore, it stated that prior GAO decisions found “that an agency action constituted
a rule for CRA purposes ... [if] the action imposed requirements that were both certain and
final.”85 Since proposed rules “are proposals for future agency action that are subject to change ...
and do not have a binding effect on the obligations of any party,”86 GAO concluded they are “not
a triggering event for CRA purposes.”87 However, GAO also noted that because the CRA’s
expedited procedure for review of agency rules was enacted pursuant to Congress’s constitutional
authority to establish its own procedural rules,88 it is for “Congress to decide whether [the] CRA
would apply to a resolution disapproving a proposed rule.”89
For a broad discussion of congressional options for addressing EPA’s greenhouse gas regulations,
see CRS Report R41212, EPA Regulation of Greenhouse Gases: Congressional Responses and
Options, by James E. McCarthy.
Q: How will judicial review of the proposed rule work?
A: It is virtually certain that once EPA promulgates its final Section 111(d) rule, legal challenges
will be filed. CAA Section 307(b) says that such petitions for review must be filed in the U.S.
Court of Appeals for the D.C. Circuit within 60 days after the rule’s publication in the Federal
Register.90 On infrequent occasion, the D.C. Circuit has stayed agency rules pending the court’s
decision on the merits. Once the circuit court issues that decision, it may grant a dissatisfied
party’s motion asking the court to reconsider its decision, and such a party may seek Supreme
Court review. Recent history suggests that the Supreme Court is interested in cases where a
federal agency undertakes a broad or costly regulatory effort based on ambiguous authority such
81
79 Federal Register 1430, January 8, 2014.
McConnell GAO Letter, supra note 80, at 1; see 42 U.S.C. §7411(a)(2).
83
Letter from Susan A. Poling, General Counsel, Government Accountability Office, to the Honorable Harry Reid,
Mitch McConnell, Barbara Boxer, and Thomas Carper, May 29, 2014 (regarding GAO’s Role and Responsibility
Under the Congressional Review Act) at 1 [hereinafter GAO May 2014 CRA Letter]. Specifically, GAO “agreed to
answer three questions: (1) what is GAO’s role under CRA and what type of agency action triggers that role; (2) what
role does GAO play under CRA with regard to a proposed rule; and (3) do prior GAO opinions under CRA examining
final agency actions outside of the rulemaking process provide precedent in answering these questions.” Ibid.
84
Ibid. at 5.
85
Ibid. at 8.
86
Ibid.
87
Ibid. at 6.
88
See U.S. Constitution, Article I, Section 5, Clause 2.
89
GAO May 2014 CRA Letter, supra note 83, at 9.
90
42 U.S.C. §7607(b).
82
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as that in Section 111(d).91 As an aside, three cases already filed in the D.C. Circuit seek judicial
review of EPA’s proposed Section 111(d) rule, notwithstanding the general insistence of courts
that judicial review await promulgation of a final rule.92 This general principle suggests that these
pre-promulgation challenges are likely to be dismissed.
A court reviewing an agency rule typically will defer to the agency’s resolution of any
ambiguities in the statutory provision claimed by the agency as authority for the rule. This
principle of judicial deference, known as “Chevron deference” after the decision often cited for
the rule,93 obviously can affect whether a court endorses or invalidates the rule in question. A
recent Supreme Court decision, however, suggests that in the particular case of EPA’s final
Section 111(d) rule, Chevron deference may not be a foregone conclusion. In a CAA decision in
2014, the Supreme Court opined that where a statutory interpretation by EPA “would bring about
an enormous ... expansion in EPA’s regulatory authority”—which, some argue, describes the
proposed Section 111(d) rule—a court should demand “clear congressional authorization” and not
merely the agency’s say-so.94
For Further Information
Q: Who are the CRS contacts for questions regarding this rule?
A: CRS analysts, listed below, cover areas related to the proposed rule.
Area of Expertise
Name
Phone
Clean Air Act
Jim McCarthy
7-7225
jmccarthy@crs.loc.gov
Legal issues
Rob Meltz
7-7891
rmeltz@crs.loc.gov
Climate change
Jane Leggett
7-9525
jaleggett@crs.loc.gov
State GHG emission programs
Jonathan Ramseur
7-7919
jramseur@crs.loc.gov
Carbon capture and sequestration
Pete Folger
7-1517
pfolger@crs.loc.gov
Electric utilities
Richard Campbell
7-7905
rcampbell@crs.loc.gov
Regulatory process
Maeve Carey
7-7775
mcarey@crs.loc.gov
Congressional Review Act
Alissa Dolan
7-8433
adolan@crs.loc.gov
91
As for a “broad” EPA regulatory effort, see Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014). The
following paragraph in the text above indicates the Court in this case was concerned with the absence of clear CAA
authority for an EPA program the Court regarded as expansive. As for an EPA regulatory effort that may prove
“costly” to regulated entities, see the Court’s recent decision to hear a CAA case challenging whether EPA
unreasonably refused to consider costs in determining whether it was “appropriate,” in the statute’s words, to regulate
hazardous air pollutants emitted by electric utilities. White Stallion Energy Center, LLP vs. EPA, 748 F.3d 1222 (D.C.
Cir. 2014), cert. granted sub nom. Michigan vs. United States, No. 14-46 (November 25, 2014).
92
In re: Murray Energy Corp., No. 14-112 (D.C. Cir. filed June 18, 2014); State of West Virginia v. EPA, No. 14-1146
(D.C. Cir. filed August 1, 2014); Murray Energy Corp. v. EPA, No. 14-1151 (D.C. Cir. filed August 15, 2014).
93
Chevron vs. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-843 (1984).
94
Utility Air Regulatory Group, 134 S. Ct. at 2444.
Congressional Research Service
28
EPA’s Proposed Greenhouse Gas Regulations for Existing Power Plants
Author Contact Information
James E. McCarthy
Specialist in Environmental Policy
jmccarthy@crs.loc.gov, 7-7225
Jonathan L. Ramseur
Specialist in Environmental Policy
jramseur@crs.loc.gov, 7-7919
Robert Meltz
Legislative Attorney
rmeltz@crs.loc.gov, 7-7891
Alissa M. Dolan
Legislative Attorney
adolan@crs.loc.gov, 7-8433
Jane A. Leggett
Specialist in Energy and Environmental Policy
jaleggett@crs.loc.gov, 7-9525
Congressional Research Service
29
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.