EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

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EPA’s Clean Power Plan for Existing Power

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R44341

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Summary

On October 10, 2017, the U.S. Environmental Protection Agency (EPA) proposed to repeal the

Clean Power Plan (CPP), the Obama Administration rule that would limit carbon dioxide (CO2)

emissions from existing fossil-fuel-fired power plants. The action came in response to Executive

Order 13783, in which President Trump directed federal agencies to review existing regulations

and policies that potentially burden the development or use of domestically produced energy

resources. Among the E.O.’s specific directives was that EPA review the CPP, which was one of

the Obama Administration’s most important actions directed at reducing greenhouse gas (GHG)

emissions.

The Clean Power Plan was promulgated in August 2015 to reduce GHG emissions from the

generation of electric power. Fossil-fueled electric power plants are the largest individual U.S.

sources of GHG emissions, accounting for about 29% of the U.S. total from all sources. The rule

set individual state targets for average emissions from existing power plants—interim targets for

the period 2022-2029 and final targets to be met by 2030. The targets for each state were derived

from a formula based on three “building blocks”—efficiency improvements at individual coalfired power plants and increased use of renewable power and natural gas combined-cycle power

plants to replace more polluting coal-fired units. Although EPA set state-specific targets, states

would determine how to reach these goals, not EPA.

EPA has said it would expect the rule’s targets to reduce total power plant CO2 emissions by about

32% when fully implemented in 2030 as compared with 2005 levels. A variety of factors—some

economic, some the effect of government policies at all levels—have already reduced power

sector CO2 emissions more than ¾ of this amount as of 2016.

Although EPA is proposing to repeal the CPP, it did not propose repeal of the GHG

“endangerment finding,” the 2009 agency finding that emissions of CO2 and other GHGs

endanger public health and welfare. Without addressing the finding, EPA appears to have a

continuing obligation to limit emissions of CO2 from power plants. Thus, in addition to the

proposed repeal of the CPP, EPA has issued an Advance Notice of Proposed Rulemaking

(ANPRM) to solicit information on systems of emission reduction that it might require in a future

rule to replace the CPP.

Besides EPA’s proposal to repeal the rule, the rule is the subject of ongoing litigation in which a

number of states and other entities have challenged it (while other states and entities have

intervened in support of it). On February 9, 2016, the Supreme Court stayed implementation of

the rule for the duration of the litigation. The U.S. Court of Appeals for the District of Columbia

heard oral arguments in the case in September 2016, but agreed to an EPA request to continue to

hold the case in abeyance while the agency proceeds to repeal the CPP.

This report provides background information, discusses the statutory authority under which EPA

promulgated the rule, and describes the rule’s current status as of November 2017. The Clean

Power Plan relies on authority asserted by EPA in Section 111(d) of the Clean Air Act (CAA).

This section has been infrequently used and seldom interpreted by the courts, so a number of

questions have arisen regarding the extent of EPA’s authority and the mechanisms of

implementation.

The report also summarizes the provisions of the Clean Power Plan rule as it was finalized on

August 3, 2015, including



how large an emission reduction would be achieved under the rule nationwide,

how EPA allocated emission reduction requirements among the states,

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions



the potential role of cap-and-trade systems and other flexibilities in

implementation,

what role the actions of individual power plants (i.e., “inside the fence” actions)

and actions by other actors, including energy consumers (i.e., “outside the fence”

actions) might play in compliance strategies, and

what role there would be for existing programs at the state and regional level,

such as the nine-state Regional Greenhouse Gas Initiative (RGGI), and for

broader GHG reduction programs such as those implemented in California.

The report also discusses options that Congress has to influence EPA’s action.

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Contents

Background ..................................................................................................................................... 2

Q: Why did EPA promulgate the Clean Power Plan? ......................................................... 2

Q: How much progress has the United States made in reducing GHG emissions

and meeting emission targets? ......................................................................................... 3

Q: How much does the generation of electricity contribute

to total U.S. GHG emissions? .......................................................................................... 5

Q: What other steps has EPA taken to reduce GHG emissions? ......................................... 6

Statutory Authority .......................................................................................................................... 8

Q: Under what authority did EPA promulgate the Clean Power Plan rule? ........................ 8

Q: What does Section 111(d), the authority EPA cited for the Clean Power Plan,

bar EPA from regulating?................................................................................................. 8

Q: When has EPA previously used its Section 111(d) authority? ....................................... 9

Q: How do the Clean Power Plan standards for existing power plants relate to

EPA’s GHG standards for new fossil-fueled power plants? ............................................ 11

Q: How does Section 111 define the term “standards of performance”? ........................... 11

The Final Rule ............................................................................................................................... 12

Q: By how much would the Clean Power Plan reduce CO2 emissions? ........................... 12

Q: How much progress has already been made in reaching the CPP’s emission

reduction goals? ............................................................................................................. 14

Q: To whom does the Clean Power Plan directly apply? .................................................. 14

Q: What types of facilities are affected by the final rule? ................................................. 14

Q: How many EGUs and facilities are affected by the final rule? .................................... 15

Q: Does the Clean Power Plan apply to all states and territories? .................................... 15

Q: What was the deadline under the final rule for submitting state plans to EPA? .......... 15

Q: What are the different options available to states when preparing their

state plans? ..................................................................................................................... 15

Q: Can states join together and submit multi-state plans? ................................................ 16

Q: What are the national CO2 emission performance rates in the final rule? ................... 16

Q: How did EPA establish the national CO2 emission performance rates?....................... 16

Q: How did EPA calculate the state-specific emission rate targets? ................................. 18

Q: What are the state-specific emission rate targets?........................................................ 18

Q: How did EPA calculate the state-specific mass-based targets? .................................... 20

Q: What are the state-specific mass-based targets? .......................................................... 21

Q: Does the Clean Power Plan apply to EGUs on Indian lands? ...................................... 22

Q: Would states and companies that have already reduced GHG emissions receive

credit for doing so? ........................................................................................................ 23

Q: How does EPA’s Clean Power Plan interact with existing GHG emission

reduction programs in the states, namely the Regional Greenhouse Gas

Initiative and California’s climate policies? .................................................................. 24

Q: What role is there for “outside-the-fence” emission reductions? ................................. 25

Q: How would new fossil-fuel-fired power plants and their resulting electricity

generation and emissions factor into a state’s emission rate or emission

calculations? .................................................................................................................. 25

Q: What role does nuclear power play in the Clean Power Plan rule? ............................. 26

Q: What role does energy efficiency play in the Clean Power Plan final rule? ................ 26

Q: What role does biomass play in the Clean Power Plan? .............................................. 26

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Q: What is the Clean Energy Incentive Program? ............................................................ 27

Q: How did the final Clean Power Plan differ from the proposed rule? ........................... 28

Q: If the Clean Power Plan is upheld and not repealed, what would be the next

steps in its implementation? ........................................................................................... 28

Q: What incentives are there for early compliance? ......................................................... 29

Q: If the Clean Power Plan is upheld and goes into effect, what happens if a state

fails to submit an adequate plan by the appropriate deadline? ...................................... 30

Q: What would the proposed FIP have required? ............................................................. 30

Current Status/Next Steps.............................................................................................................. 31

Q: What is the current status of the Clean Power Plan? ................................................... 31

Q: What is the basis of EPA’s proposed CPP repeal?........................................................ 31

Q: What are the next steps after the closing of the public comment period? .................... 32

Q: Would repeal of the CPP be subject to judicial review? .............................................. 32

Q: Is EPA considering a replacement for the CPP? .......................................................... 32

Costs and Benefits of the Clean Power Plan ................................................................................. 33

Q: What role did cost play in EPA’s choice of emission standards? ................................. 33

Q: What were EPA’s estimates of the costs of the final rule? ........................................... 33

Q: What other estimates of the Clean Power Plan’s cost are there? ................................. 34

Q: What were the benefits EPA estimated for the Clean Power Plan?.............................. 34

Q: What are the estimated costs and benefits of the proposed repeal of the CPP? ........... 35

Q: How do the conclusions of EPA’s 2017 benefit-cost analysis compare to those

from the 2015 analysis? ................................................................................................. 36

Q: What accounts for the differences in EPA’s 2017 cost and benefit estimates as

compared to the 2015 RIA’s estimates? ......................................................................... 37

Potential Impacts on the Electricity Sector.................................................................................... 38

Q: How might the Clean Power Plan impact electricity prices and

electricity bills? .............................................................................................................. 38

Q: How did the Clean Power Plan address electricity reliability? .................................... 39

Q: What types of electricity sector infrastructure changes might result from

the Clean Power Plan? ................................................................................................... 39

Reconsidering the Rule ................................................................................................................. 40

Q. What was required by President Trump’s Executive Order 13783? ............................ 40

Q. What is the process for suspending, revising, or repealing the Clean Power

Plan? .............................................................................................................................. 40

The CPP and the International Paris Agreement ........................................................................... 41

Q: What would the CPP contribute to meeting the U.S. GHG mitigation pledge

under the international Paris Agreement (PA)?.............................................................. 41

Q: Can the United States meet its contribution under the Paris Agreement without

the Clean Power Plan? ................................................................................................... 44

Congressional Actions ................................................................................................................... 45

Q: Can Congress use the Congressional Review Act (CRA) to disapprove

the rule? ......................................................................................................................... 45

Q: What other steps might Congress take to replace, rescind, or modify the Clean

Power Plan rule? ............................................................................................................ 46

Judicial Review ............................................................................................................................. 47

Q: What parties have joined litigation over the final Clean Power Plan rule? .................. 47

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Q: What is the status and time frame of litigation challenging the final Clean

Power Plan rule, and will the rule remain in place while the litigation is

pending?......................................................................................................................... 49

Q: What legal arguments are being made for and against the final Clean Power

Plan rule? ....................................................................................................................... 50

Q: Will the proposed repeal affect the Clean Power Plan litigation? ................................ 52

Q: Might other litigation affect the final Clean Power Plan rule? .................................... 52

For Further Information................................................................................................................. 53

Q: Who are the CRS contacts for questions regarding this rule? ...................................... 53

Figures

Figure 1. U.S. GHG Emissions (Net) .............................................................................................. 4

Figure 2. Percentage Change in U.S. GHG Emissions, the Economy, and Population ................... 5

Figure 3. CO2 Emissions from the Electricity Sector ...................................................................... 6

Figure 4. Historical Emissions and EPA Baseline and Clean Power Plan Projections .................. 13

Figure 5. Electricity Regions in EPA’s Methodology .................................................................... 17

Figure 6.States Participating in Clean Power Plan Litigation ....................................................... 48

Tables

Table 1. National CO2 Performance Rates .................................................................................... 16

Table 2. State-Specific Emission Rate Baselines (2012), Emission Rate Targets (2030),

and Percentage Reductions Compared to Baselines ................................................................... 18

Table 3. State-Specific 2012 CO2 Emission Baselines and 2030 CO2 Emission Targets .............. 21

Table 4. Emission Rate and Emission Targets for Areas of Indian Country.................................. 23

Table 5. Comparison of Selected Modeling Projections: CPP and Non-CPP Scenarios ............... 43

Contacts

Author Contact Information .......................................................................................................... 54

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

n October 10, 2017, the U.S. Environmental Protection Agency (EPA) proposed to repeal

the Clean Power Plan (CPP), an Obama Administration rule that would limit carbon

dioxide (CO2) emissions from existing fossil-fuel-fired power plants.1 The action came in

response to Executive Order 13783, in which President Trump directed federal agencies to review

existing regulations and policies that potentially burden the development or use of domestically

produced energy resources. Among the E.O.’s specific directives was that EPA review the CPP,

which was one of the Obama Administration’s most important actions directed at reducing

greenhouse gas (GHG) emissions.

EPA promulgated the CPP on August 3, 2015.2 The rule set standards for CO2 emissions from

existing fossil-fuel-fired power plants under Section 111(d) of the Clean Air Act (CAA).3

Information regarding the rule, including EPA’s Regulatory Impact Analysis and numerous EPA

Fact Sheets, can be found at https://web.archive.org/web/20161104002205/http://www2.epa.gov/

cleanpowerplan/clean-power-plan-existing-power-plants.

Interest in the rule has been intense, reflecting what is generally recognized to be the importance

of its potential effects. 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 from power plants. At the same time, an overwhelming scientific

consensus has formed that there are risks, potentially catastrophic, of greenhouse gas-induced

climate change. To determine how the CPP addresses these issues, congressional committees

asked EPA officials numerous questions about the rule, and individual Members wrote EPA

seeking additional information about the rule’s potential impacts.4 Following the rule’s proposal,

EPA received more than 4.3 million public comments, the most ever for an EPA rule.5 EPA

responded to questions and comments by making numerous changes to the rule between proposal

and promulgation. Congressional and public interest has continued since the final rule was

promulgated.

Besides EPA’s proposal to repeal the rule, the rule is the subject of ongoing litigation: a number of

states and other entities have challenged it, while other states and entities have intervened in

support of it. On February 9, 2016, the Supreme Court granted applications to stay the rule for the

duration of the litigation. The U.S. Court of Appeals for the District of Columbia heard oral

arguments in the case in September 2016, but agreed to an EPA request to continue to hold the

case in abeyance while the agency proceeds with the repeal process.

In order to provide basic information about the rule as promulgated, and about the ongoing

litigation and proposed repeal of the rule, this report presents a series of questions and answers.

Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 82

Federal Register 48,035 (October 16, 2017).

U.S. EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,”

Final Rule, 80 Federal Register 64661, October 23, 2015.

42 U.S.C. §7411(d).

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.

More than 34,000 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/.

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Background

Q: Why did EPA promulgate the Clean Power Plan?

A: EPA promulgated emissions guidelines to limit carbon dioxide (CO2) emissions from existing

power plants under Section 111(d) of the CAA for a variety of reasons. Some important context

includes the following:



The Supreme Court in Massachusetts v. EPA in 2007 determined that “air

pollutant,” as used in the CAA, covers GHGs.6 EPA thereafter determined that

GHGs are air pollutants that were “reasonably anticipated to endanger both

public health and welfare.”7

In December 2010, EPA entered into a settlement agreement to issue New Source

Performance Standards (NSPSs) for GHG emissions from electric generating

units (EGUs) under Section 111(b) of the CAA and emission guidelines under

Section 111(d) covering existing EGUs.8 As discussed further below,9 EPA

finalized NSPSs for GHG emissions from new, modified, and reconstructed

fossil-fuel-fired EGUs at the same time as the CPP.10

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, consistent with an 80% reduction by 2050.11 The President set a

further goal as the U.S. national contribution to global GHG reductions under the

2015 Paris Agreement: a 26% to 28% reduction from 2005 levels to be achieved

by 2025, consistent with a straight-line path to an 80% reduction by 2050.12

Other countries have also pledged GHG emissions abatement.13 Parties to the

Massachusetts v. 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. v. Connecticut, 564 U.S. 410, 424-29 (2011). For further discussion of

these decisions, see CRS Report R43699, Key Historical Court Decisions Shaping EPA’s Program Under the Clean

Air Act, by (name redacted) and (name redacted) .

See EPA, “Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean

Air Act,” Final Rule, 74 Federal Register 66496, December 15, 2009. EPA’s “endangerment finding” was upheld by

the Supreme Court in Util. Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014).

See Settlement Agreement Between State of New York, and U.S. EPA, December 23, 2010, at http://www2.epa.gov/

sites/production/files/2013-09/documents/boilerghgsettlement.pdf; CRS Report R44807, U.S. Climate Change

Regulation and Litigation: Selected Legal Issues, by (name redacted)

, p. 12.

See below, “Q: How do the Clean Power Plan standards for existing power plants relate to EPA’s GHG standards for

new fossil-fueled power plants?”

EPA, “Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary

Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64509, October 23, 2015. As noted in

preamble to this rule, EPA first proposed a New Source Performance Standard for GHG emissions from new fossil

fuel-fired EGUs in April 2012; it withdrew that proposal and issued a new proposal in January 2014.

See CRS Report R40001, A U.S.-Centric Chronology of the United Nations Framework Convention on Climate

Change, by (name redacted); and CRS Report R43120, President Obama’s Climate Action Plan, coordinated by (name

redacted) .

See CRS Report R44609, Climate Change: Frequently Asked Questions About the 2015 Paris Agreement, by (name re

dacted) and (name redacted)

, Climate Change: Frequently Asked Questions about the 2015 Paris Agreement, by

(name redacted) and (name redacted).

See CRS In Focus IF10239, President Obama Pledges Greenhouse Gas Reduction Targets as Contribution to 2015

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Paris Agreement (currently 143) are legally bound to submit GHG emission

reduction pledges, although they are not bound to the quantitative targets

themselves. As of April 27, 2017, 165 intended nationally determined

contributions—covering more than 190 countries, including all major emitters—

had been submitted. The PA entered into force on November 4, 2016, and the

United States is a Party, following President Obama’s communication of U.S.

acceptance of the agreement in September 2016. The U.S. Nationally Determined

Contribution (NDC) is registered in the interim Registry of NDCs.14

Fossil-fueled EGUs account for 29% of U.S. GHG emissions.15 It would be challenging to

substantially abate U.S. GHG emissions without addressing these sources.

Q: How much progress has the United States made in reducing

GHG emissions and meeting emission targets?

A: Figure 1 illustrates net U.S. GHG emissions between 1990 and 2015.16 As the figure indicates,

U.S. GHG emissions increased during most of the years between 1990 and 2007. GHG emissions

decreased substantially in 2008 and 2009 as a result of a variety of factors—some economic,

some the effect of government policies at all levels. Since 2010, emissions have fluctuated but

have not surpassed 2009 levels.

The figure also compares recent U.S. GHG emission levels to the 2020 and 2025 emission goals.

Based on 2015 GHG emission levels, the United States is more than halfway to reaching

President Obama’s 2020 goal (17% below 2005 levels). U.S. GHG levels in 2015 were 11%

below 2005 levels.

(...continued)

Global Climate Change Deal, by (name redacted) .

On June 1, 2017, however, President Trump announced his intention to withdraw the United States from the Paris

Agreement. For additional information on the CPP and the Paris Agreement, see “The CPP and the International Paris

Agreement” below.

EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2015, April 2017, p. 2-24, at

https://www.epa.gov/sites/production/files/2017-02/documents/2017_complete_report.pdf.

Net GHG emissions include net carbon sequestration from land use, land use change, and forestry. This involves

carbon removals from the atmosphere by photosynthesis and storage in vegetation.

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Figure 1. U.S. GHG Emissions (Net)

Compared to 2020 and 2025 Emission Targets

Source: Prepared by CRS; data from EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2015, April

2017, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks.

Notes: Net GHG emissions includes net carbon sequestration from land use, land use change, and forestry. This

involves carbon removals from the atmosphere by photosynthesis and storage in vegetation. The two lines for

the 2025 target represent the target range of 26% to 28% below 2005 levels.

Figure 2 illustrates the percentage change in net U.S. GHG emissions, U.S. economic activity

measured as gross domestic product (GDP, adjusted for inflation), and U.S. population between

1990 and 2015. As Figure 2 indicates, during that period, U.S. economic activity increased by

83%, population increased 28%, and GHG emissions increased by 5%.

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Figure 2. Percentage Change in U.S. GHG Emissions, the Economy, and Population

1990-2015

Source: CRS figure using GHG emissions data from Environmental Protection Agency, Inventory of Greenhouse

Gas Emissions and Sinks: 1990-2015, April 2017; GDP data from U.S. Bureau of Economic Analysis, National

Economic Accounts; population data from U.S. Census Bureau; accessed May 12, 2017.

Notes: GDP, or “gross domestic product,” is one measure of national economic activity. The six GHGs for

which emissions are estimated are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,

perfluorocarbons, and sulfur hexafluoride.

Net GHG emissions includes net carbon sequestration from land use, land use change, and forestry. This

involves carbon removals from the atmosphere by photosynthesis and storage in vegetation.

Q: How much does the generation of electricity contribute

to total U.S. GHG emissions?

A: The U.S. electricity generation sector17 contributed about 29% of all U.S. GHG emissions in

2015.18 CO2 emissions account for the vast majority (99% in 2015) of GHG emissions from the

electricity sector. As illustrated in Figure 3, CO2 emissions from electricity generation generally

increased between 1990 and 2007, but have generally decreased since that time.19

Other sectors include transportation, industrial, commercial, and residential.

EPA, Inventory of Greenhouse Gas Emissions and Sinks: 1990-2015, April 2017.

For a further discussion, see CRS Report R44451, U.S. Carbon Dioxide Emissions Trends and Projections: Role of

the Clean Power Plan and Other Factors, by (name redacted)

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Figure 3. CO2 Emissions from the Electricity Sector

1990-2015

Source: Prepared by CRS, data from EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2015, April

2017.

Q: What other steps has EPA taken to reduce GHG emissions?

A: Prior to the promulgation of this rule, EPA had already promulgated GHG emission standards

for light-duty and medium- and heavy-duty vehicles, using its authority under Section 202 of the

CAA.20 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 23% of U.S. GHG emissions in 2015.21

GHG 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 vehicle, when fully

implemented in MY2018. A second round of standards, to address later medium- and heavy-duty

vehicles, was promulgated on August 16, 2016.22 The new standards cover model years 20182027 for certain trailers, and model years 2021-2027 for semi-trucks, large pickup trucks, vans,

and all types and sizes of buses and work trucks.23 The standards are expected to lower CO2

See CRS Report R40506, Cars, Trucks, Aircraft, and EPA Climate Regulations, by (name redacted) and (name re

dacted)

, and CRS Report R42721, Automobile and Truck Fuel Economy (CAFE) and Greenhouse Gas Standards,

by (name redacted), (name redacted), and (name redacted) .

EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2015, April 2017, pp. 3-24 and ES-7.

EPA, “Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and

Vehicles—Phase 2 ,” 81 Federal Register 73478, October 25, 2016.

On October 27, 2017, the D.C. Circuit Court of Appeals granted the Truck Trailer Manufacturers Association’s

(continued...)

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

emissions by approximately 1.1 billion metric tons over the life of the covered vehicles,

according to EPA.

EPA determined that 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 partially upheld that position in June 2014, provided that the sources were already

required to obtain permits for other conventional pollutants.24

The GHG permitting requirements for stationary sources have been in place since 2011 but were

limited by EPA’s “Tailoring Rule” to the very largest emitters—about 200 facilities as of mid2014. The Supreme 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.

In 2016, EPA also promulgated GHG (methane) emission standards for new oil and gas sources25

and for new and existing municipal solid waste (MSW) landfills.26 Although these rules have

been promulgated, they are being challenged in the U.S. Court of Appeals for the D.C. Circuit.27

President Trump’s Executive Order 13783 requires EPA to review the methane emission

standards for oil and gas sources.28 In addition, EPA announced that it will reconsider fugitive

emissions monitoring and other requirements that are part of the oil and gas methane standards29

and has proposed to stay the compliance date for those requirements for two years.30

(...continued)

request to stay the requirements for trailers pending the judicial review of the medium- and heavy-duty vehicles

rule. Order, Truck Trailer Manufacturers Ass’n v. EPA, No. 16-1430 (October 27, 2017). The court previously granted

EPA’s request to pause the judicial review during agency’s reconsideration of the rule. Order, Truck Trailer

Manufacturers Ass’n v. EPA, No. 16-1430 (May 8, 2017).

Utility Air Regulatory Group vs. EPA, 134 S. Ct. 2427 (2014). For further discussion of this case, see CRS Report

R44807, U.S. Climate Change Regulation and Litigation: Selected Legal Issues, by (name redacted)

, p. 24.

EPA, “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources; Final Rule,”

81 Federal Register 35824, June 3, 2016.

EPA, “Standards of Performance for Municipal Solid Waste Landfills: Final Rule,” 81 Federal Register 59332,

August 29, 2016; and “Emission Guidelines and Compliance Times for Municipal Solid Waste Landfills: Final Rule,”

81 Federal Register 59276, August 29, 2016.

Industry trade associations and waste management and recycling companies have challenged EPA’s 2016 revised

emission guidelines for existing MSW landfills in the D.C. Circuit. Nat’l Waste and Recycling Ass’n v. EPA, No. 161371 (D.C. Cir., filed October 27, 2016); Utility Air Regulatory Group v. EPA, No. 16-1374 (D.C. Cir., filed October

28, 2016). Several states and industry groups are challenging the emission standards for new oil and gas sources. North

Dakota v. EPA, No. 16-1242 (D.C. Cir. August 8, 2016). On April 7, 2017, the Department of Justice filed a motion,

seeking to hold the cases in abeyance until after EPA completes its review of the rule and subsequent rulemakings

resulting from its review. Notice of Exec. Order and Motion to Hold Cases in Abeyance, Am. Petroleum Inst. v. EPA,

No. 13-1108 (D.C. Cir. April 7, 2017).

Exec. Order No. 13783, 82 Federal Register 16093 §7 (March 31, 2017) (signed on March 28, 2017).

Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources; Grant of

Reconsideration and Partial Stay, 82 Federal Register 25730, 25731-32 (June 5, 2017).

Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources: Stay of Certain

Requirements, Proposed Rule, 82 Federal Register 27645 (June 16, 2017). The agency also proposed a three-month

stay to cover the gap period from when the two-year delay is finalized to its effective date pursuant to the

Congressional Review Act (CRA). Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and

Modified Sources: Three Month Stay of Certain Requirements, Proposed Rule, 82 Federal Register 27641 (June 16,

(continued...)

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Statutory Authority

Q: Under what authority did EPA promulgate the Clean Power Plan rule?

A: EPA cited Section 111(d) of the CAA31 for its authority to promulgate the CPP.32 Section

111(d) requires EPA, among other things, to issue regulations providing for states to submit plans

to EPA to impose “standards of performance” for existing stationary sources for any air pollutant

that meets certain criteria. The first criterion is that the air pollutant must not already be regulated

under certain other CAA provisions,33 which are discussed further below. The second criterion is

that CAA Section 111(b) NSPSs apply to the source category for the air pollutant.34 EPA finalized

Section 111(b) NSPSs for new, modified, or reconstructed power plants for CO2 when it issued

the CPP rule.35 EPA often refers to Section 111(d) regulations as “emission guidelines.”36

Q: What does Section 111(d), the authority EPA cited for the Clean Power Plan,

bar EPA from regulating?

A: CAA Section 111(d) bars EPA from regulating an air pollutant pursuant to Section 111(d) if the

air pollutant is already regulated as a criteria pollutant under a National Ambient Air Quality

Standard (NAAQS) under CAA Section 108 or, per EPA’s interpretation, as a hazardous air

pollutant (HAP) under CAA Section 112.37 CO2 is not regulated as a criteria pollutant or a HAP

under either of these provisions.

Because the House and Senate passed different versions of CAA Section 111(d) in the 1990 CAA

amendments, controversy exists over EPA’s authority per the Section 112 criterion.38 Under the

(...continued)

2017). In the proposal, EPA explains that if the two-year stay is finalized, it would likely be considered a “major rule”

under the CRA. Ibid. at 27642. Under the CRA, a major rule cannot take effect until 60 days after publication in the

Federal Register or after Congress receives the rule report, whichever is later. 5 U.S.C. § 801(a)(3). Based on its

expectation that courts are not likely to consider a three-month stay to be a major rule under the CRA, the

Administration anticipates that the three-month stay, if finalized, would take effect immediately upon its publication in

the Federal Register and would stay the requirements for the period between the two-year stay’s filing and effective

dates. 82 Federal Register at 27642-43.

42 U.S.C. §7411(d).

See EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,”

Final Rule, 80 Federal Register 64661, 64663-69, 64697, 64700-36, 64751-79, 64783-86, 64811-816, 64826, 6483544, 64853-76, 64881-82, 64926, 64942, October 23, 2015.

42 U.S.C. §7411(d)(i).

42 U.S.C. §7411(d)(ii). CAA Section 111(b), 42 U.S.C. Section 7411(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.”

EPA, “Standards of Performance for Greenhouse Gas Emissions From New, Modified, and Reconstructed Stationary

Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64509, October 23, 2015.

See, for example, ibid. (passim); 40 C.F.R. subparts C, Cc, Cd, Ce, UUUU.

The CAA regulates emissions from stationary sources in multiple ways, three of which are relevant here. The first

way is by NAAQSs, 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.

See below, “Q: What legal arguments are being made for and against the final Clean Power Plan rule?” in the

(continued...)

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

House’s provision, CAA Section 111(d)(1)(A)(i) requires EPA to issue a rule under which each

state shall submit to EPA a plan adopting standards of performance for any air pollutant that “is

not included on a list published under section 108(a) or emitted from a source category which is

regulated under section 112.... ”39 Because EPA regulates power plants under Section 112 for

HAP,40 some have argued that EPA is barred from regulating power plants under Section 111(d)

for CO2, although CO2 is not regulated as a HAP under Section 112.41

In the final CPP rule, EPA addressed this issue, finding the CAA Section 112 exclusion to “not

bar the regulation under CAA section 111(d) of non-HAP from a source category, regardless of

whether that source category is subject to standards for HAP under CAA section 112.”42

Describing the House amendment as ambiguous,43 EPA stated that the “sole reasonable”

interpretation is that “the phrase ‘regulated under section 112’ refers only to the regulation of

HAP emissions. In other words, EPA’s interpretation concluded that source categories ‘regulated

under section 112’ are not regulated by CAA section 112 with respect to all pollutants, but only

with respect to HAP.”44

In making this argument, EPA also cited the Senate’s 1990 amendment to CAA Section

111(d)(1)(A)(i), which is published in the U.S. Statutes at Large but not in the U.S. Code.45 The

Senate’s amendment excludes from Section 111(d) regulation any air pollutant “included on a list

published under section 108(a) or 112.... ”46 As such, the Senate language excludes air pollutants

regulated under Section 112, rather than source categories, from Section 111(d) regulation, which

is consistent with EPA regulating power plants for CO2 under Section 111(d).

Q: When has EPA previously used its Section 111(d) authority?

A: An analysis by the American College of Environmental Lawyers observed that since the

1970s, EPA has promulgated emission guidelines under Section 111(d) of the CAA on seven

occasions.47

(...continued)

Judicial Review section.

P.L. 101-549, §108(g), 104 Stat. 2399, 2467 (1990), codified at 42 U.S.C. §7411(d)(1)(A)(i).

EPA has regulated HAPs from power plants under CAA Section 112 as part of its mercury and air toxics standards

(MATS). The Supreme Court held that EPA’s promulgation of the MATS rule was unlawful for failure to properly

consider costs at the threshold stage of determining whether such regulation was “appropriate and necessary.”

Michigan v. EPA, 135 S. Ct. 2699, 2707-2711 (2015). It remanded the case to the court of appeals, which remanded the

MATS rule without vacatur to EPA to make the additional findings required by the Supreme Court. White Stallion

Energy Ctr. LLC v. EPA, No. 12-1100, order (D.C. Cir. December 15, 2015) (per curiam).

See below, “Q: What legal arguments are being made for and against the final Clean Power Plan rule?”

EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,”

Final Rule, 80 Federal Register 64711, October 23, 2015.

Ibid., 64712-64714.

Ibid., 64714; see also below, “Q: What legal arguments are being made for and against the final Clean Power Plan

rule?”

If there is a discrepancy between the U.S. Statutes at Large and the U.S. Code, the U.S. Statutes at Large is the

controlling legal evidence of the law, unless Congress has enacted the relevant title of the U.S. Code as positive law; in

that case, the U.S. Code is also legal evidence of the law. See 1 U.S.C. §§112, 204(a).

P.L. 101-549, §302(a), 104 Stat. 2399, 2574 (1990).

American College of Environmental Lawyers, “Memorandum for Environmental Council of the States (ECOS)

Concerning Clean Air Act 111(d) Issues,” February 22, 2014, 5, 8-10, http://acoel.org/file.axd?file=

2014%2F9%2FACOEL+Master+Memo+2-22-14+(1).pdf.

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

EPA’s 2005 Clean Air Mercury Rule (CAMR) delisted coal-fired electric utility steam generating

units from Section 112 of the CAA and, instead, established a cap-and-trade system for mercury

under Section 111(d);48 however, the U.S. Court of Appeals for the D.C. Circuit vacated CAMR

in 2008.49 The court found that EPA’s delisting of the source category from Section 112 was

unlawful and that EPA was obligated to promulgate standards for mercury and other hazardous air

pollutants under Section 112.50 The court, therefore, did not reach the question of whether the

flexible approach taken by EPA for mercury controls (i.e., a cap-and-trade system) met the

requirements of Section 111(d).

In 1996, EPA used its Section 111(d) authority to regulate emissions of methane and non-methane

organic compounds from large landfills.51 These regulations set numeric emission limits and

required designated landfills to use certain types of control equipment.52 In August 2016, EPA

revised emission guidelines for existing landfills operating prior to July 17, 2014.53

EPA also used its Section 111(d) authority for another emission guideline rule for large municipal

waste combustors, which EPA proposed in 1989 and finalized in 1991 pursuant to a consent

decree.54 However, the 1990 CAA amendments added a new CAA Section 129 specifically to

address emissions from solid waste incinerators, including municipal waste combustors. Section

129 required Section 111 NSPS and emission guidelines for solid waste incinerators to meet

certain requirements,55 so the 1991 rule for large municipal waste combustors was superseded by

a later rule intended to comply with Section 129.56 EPA adopted the remaining Section 111(d)

emission guidelines for acid mist from sulfuric acid production units,57 fluoride emissions from

phosphate fertilizer plants,58 total reduced sulfur emissions from kraft pulp mills,59 and fluoride

emissions from primary aluminum plants.60 Additionally, EPA has promulgated six rules that

implement Section 111(d) in conjunction with the requirements of CAA Section 129.61

70 Federal Register 28606, May 18, 2005 (establishing Subpart HHHH).

New Jersey vs. EPA, 517 F.3d 574 (D.C. Cir. 2008). EPA subsequently promulgated the MATS rule pursuant to

CAA Section 112(d), which, as noted above, remains in litigation. 77 Federal Register 9304, February 16, 2012; see

also footnote 40.

New Jersey vs. EPA, 517 F.3d at 581-584.

See generally 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.

Ibid.

EPA, “Emission Guidelines and Compliance Times for Municipal Solid Waste Landfills,” 81 Federal Register

59276, August 29, 2016.

56 Federal Register 5514, February 11, 1991 (establishing 40 C.F.R. Part 60, Subpart Ca, large municipal waste

combustors and discussing background of rulemaking).

42 U.S.C. §7429. CAA Section 129 overrides some otherwise applicable aspects of Section 111(d) for solid waste

combustion. For example, Section 129 requires that Section 111(d)/129 state plans be submitted to EPA within one

year after promulgation of emission guidelines by EPA, whereas Section 111(d) plans have a different schedule.

60 Federal Register 65387, February 19, 1995 (establishing Subpart Cb under CAA Section 129).

42 Federal Register 55796, October 18, 1977; 56 Federal Register 5514, February 11, 1991; and 60 Federal Register

65387, December 19, 1995 (establishing current Subpart Cd).

EPA, “Phosphate Fertilizer Plants, Final Guideline Document Availability,” 42 Federal Register 12022, March 1,

1977.

EPA, “Kraft Pulp Mills; Final Guideline Document; Availability,” 44 Federal Register 29828, May 22, 1979.

EPA, “Primary Aluminum Plants; Availability of Final Guideline Document,” 45 Federal Register 26294, April 17,

1980.

See footnote 47, 5-8 (citing 40 C.F.R. Parts Cb, Ce, BBBB, DDDD, FFFF, and MMMM).

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Q: How do the Clean Power Plan standards for existing power plants relate to

EPA’s GHG standards for new fossil-fueled power plants?

A: EPA finalized standards for new fossil-fuel-fired power plants under Section 111(b) of the

CAA on the same day it finalized the CPP rule.62 As discussed earlier, when EPA sets NSPSs for a

source category for an air pollutant under Section 111(b), EPA triggers Section 111(d)’s

applicability for existing sources in the Section 111(b) regulated source category for the air

pollutant if the air pollutant is neither regulated as a criteria pollutant under a NAAQS nor,

according to EPA’s interpretation, regulated as a HAP for the source category.63 Consequently,

EPA’s adoption of NSPSs for new fossil-fueled power plants for CO2 triggered Section 111(d)’s

applicability for existing fossil-fueled power plants for CO2.

Conversely, EPA has no authority to set Section 111(d) performance standards for existing

sources in a source category for an air pollutant if EPA has no NSPSs for new sources in the

source category for the air pollutant. Many of the petitioners challenging the CPP rule for existing

power plants are also challenging EPA’s NSPSs for new, modified, or reconstructed power plants

for CO2.64 Because the CPP rule is predicated on the Section 111(b) NSPS rule, a court decision

striking down or repeal of the NSPS rule would undermine the CPP rule’s legal basis. Pursuant to

Executive Order 13783, EPA is currently reviewing the NSPS rule.65 Because EPA has not

completed its review, it is unclear what actions, if any, EPA will take with respect to the NSPS

rule.

Q: How does Section 111 define the term “standards of performance”?

A: The term “standards of performance” appears repeatedly in CAA Section 111, including in

both the Section 111(b) provisions relating to new sources and the Section 111(d) provisions

relating to existing sources in a source category. Section 111(a) 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.66

Under this definition, EPA must determine the “best system of emission reduction” (BSER) that is

“adequately demonstrated,” considering certain factors. Then, EPA or states, as applicable, must

base the standard for emissions on the degree of emission limitation that is “achievable” through

the BSER. The CAA does not define these component terms within the definition of “standard of

performance.”

EPA, “Standards of Performance for Greenhouse Gas Emissions From New, Modified, and Reconstructed Stationary

Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64509, October 23, 2015.

See above, “Q: Under what authority did EPA promulgate the Clean Power Plan rule?” and “Q: What does Section

111(d), the authority EPA cited for the Clean Power Plan, bar EPA from regulating?”

See below, “Q: Will the proposed repeal affect the Clean Power Plan litigation?” and “Q: Might other litigation

affect the final Clean Power Plan rule?”

Executive Order 13783, § 4(b)(ii), 82 Federal Register 16093 (March 31, 2017) (signed on March 28, 2017).

CAA §111(a)(1), 42 U.S.C. §7411(a)(1).

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

As discussed in more detail below,67 in the CPP rule, EPA determined the BSER for existing

power plants based on three “building blocks”: (1) efficiency improvements at affected coal-fired

power plants, (2) generation shifts among affected power plants, and (3) renewable generating

capacity.68 It then used the BSER to set CO2 emission performance rates.69 EPA used a different

approach to determine the BSER for new, modified, and reconstructed power plants.70

Courts have expanded on the CAA Section 111 definition of the term “standards of performance”

and EPA’s interpretation of its component terms, but they have done so generally with respect to

NSPSs under Section 111(b) rather than emission guidelines for existing sources under Section

111(d).71 As discussed further below,72 EPA explains that the interpretation of the term “standards

of performance” and related terms is guided by Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837

(1984), in which the U.S. Supreme Court stated that if a statute “is silent or ambiguous with

respect to the specific issue, the question for the court is whether the agency’s answer is based on

a permissible construction of the statute.”73 However, some opponents of the CPP rule argue that

this framework, known as “Chevron deference,” should not apply, at least to certain aspects of

EPA’s interpretation of CAA Section 111.74

The Final Rule

Q: By how much would the Clean Power Plan reduce CO2 emissions?

A: EPA’s final rule does not set a future level of CO2 emissions from existing electricity

generators. The rule establishes uniform national CO2 emission75 performance rates—measured in

pounds of CO2 per megawatt-hour (MWh) of electricity generation—and state-specific CO2

emission rate and emission targets. States determine which measure they want to use to be in

compliance.

Although it has been widely reported that the rule would require a 32% reduction in CO2

emissions from the electricity sector by 2030, compared to 2005 levels, this reduction was EPA’s

See “Q: How did EPA establish the national CO2 emission performance rates?”

See generally EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility

Generating Units,” Final Rule, Part V, 80 Federal Register 64661, 64717-64811, October 23, 2015.

See ibid., parts VI-VII, 80 Federal Register at 64811-64826.

See EPA, “Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed

Stationary Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64509, 64626-28, October 23,

2015; see also EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility

Generating Units,” Final Rule, 80 Federal Register 64661, 64718-19 fn. 300, October 23, 2015 (characterizing EPA’s

interpretation of the requirements for standards of performance and BSER in the 111(b) and 111(d) rules for CO 2 from

power plants as “generally consistent except to the extent that they reflect distinctions between new and existing

sources”).

See, e.g., Lignite Energy Council v. EPA, 198 F.3d 930, 933 (D.C. Cir. 1999); Sierra Club v. Costle, 657 F.2d 298

(D.C. Cir. 1981); ASARCO Inc. v. EPA, 578 F.2d 319 (D.C. Cir. 1978); Essex Chemical Corp. v. Ruckelshaus, 486

F.2d 427 (D.C. Cir. 1973); Portland Cement Ass’n v. Ruckelshaus, 486 F.2d 375, 391 (D.C. Cir. 1973).

See “Q: What legal arguments are being made for and against the final Clean Power Plan rule?”

467 U.S. at 842-43.

See “Q: What legal arguments are being made for and against the final Clean Power Plan rule?”

The final rule does not address other GHG emissions. The primary GHGs emitted by humans (and estimated by EPA

in its annual inventories) include CO2, methane, nitrous oxide, sulfur hexafluoride, chlorofluorocarbons, HFCs, and

PFCs.

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

estimate of the rule’s ultimate effect nationwide. The final rule does not explicitly require this

level of emission reduction from electric generating facilities or states.

EPA used computer models to project these CO2 emission levels. The actual emissions would

depend on how states choose to comply with the rule and how much electricity is generated (and

at what type of generation units).

Figure 4 compares EPA’s projections of CO2 emissions in the electricity sector resulting from the

final rule with historical CO2 emissions (1990-2015) from the electricity sector. The figure also

illustrates the projected CO2 emissions from the electricity sector under EPA’s baseline scenario

(i.e., business-as-usual). The figure indicates that the final rule would reduce CO2 emissions in

the electricity sector by 32% in 2030 compared to 2005 levels. Under the baseline scenario

(without the rule), EPA projected a 16% reduction by 2030 compared to 2005 levels.

Figure 4. Historical Emissions and EPA Baseline and Clean Power Plan Projections

U.S. CO2 Emissions from Electricity Generation

Source: Prepared by CRS; historical emissions from EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks:

1990–2015, April 2017; baseline and CPP projections from EPA, Power Sector Modeling, http://www.epa.gov/

airmarkets/programs/ipm/cleanpowerplan.html.

Notes: CRS converted EPA’s projected emissions from short tons to metric tons.

The Energy Information Administration (EIA) provided comparable results in its 2017 Annual

Energy Outlook.76 EIA estimated that under a reference case scenario, which includes the CPP

and other assumptions, CO2 emissions in the electricity sector would decrease by 36% in 2030

compared to 2005 levels. Under a scenario without the CPP, EIA estimated that CO2 emissions in

the electricity sector would decrease by 22% in 2030 compared to 2005 levels.

EIA, Annual Energy Outlook 2017, January 2017, https://www.eia.gov/outlooks/aeo/.

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Q: How much progress has already been made in reaching the CPP’s emission

reduction goals?

A: Due to a variety of factors, including market forces, state and federal regulations,

technological innovation, and federal tax incentives, the electric power industry is changing

rapidly.

Market forces have included



the abundance and low price of natural gas;

the flattening of demand for electric power; and

advances that have sharply lowered the costs of renewable power.

These forces have resulted in the retirement of dozens of coal-fired power plants, their

replacement by natural gas-fired and renewable generation, and a decline in GHG emissions from

the power sector.

The market forces have been buttressed by state and federal regulations—principally, the

renewable power requirements in place in about 30 states; the caps on GHG emissions in

California and nine Northeastern states;77 efficiency standards set in both state and federal

regulations; emission standards limiting cross-state air pollution, mercury, and air toxic

emissions; and standards for the disposal of coal combustion waste.

At the same time, significant technological innovations have been deployed, including high

efficiency gas turbines, which result in less CO2 per unit of power produced for new plants.

In addition, over the last decade, Congress has provided federal tax incentives for the use of wind

and solar generation technologies.

As a result of this combination of factors, between 2005 and 2016, emissions of CO2 from electric

power generation declined almost 25%, while Gross Domestic Product grew and the amount of

power generated remained essentially unchanged.78 The CO2 emission reduction already achieved

represents 77% of the reduction that EPA expected the electric power sector to achieve by 2030

under the CPP.

Q: To whom does the Clean Power Plan directly apply?

A: The final rule directs governors (or their designees) to submit state-specific plans to EPA that

describe how the states would meet their compliance obligations established by the final rule.

Q: What types of facilities are affected by the final rule?

A: The final rule addresses CO2 emissions at “affected” electric generating units (EGUs). In

general, an affected EGU is a fossil-fuel-fired unit that was in operation or had commenced

construction as of January 8, 2014, has a generating capacity above a certain minimum threshold,

CRS Report R41836, The Regional Greenhouse Gas Initiative: Lessons Learned and Issues for Congress, by

(name redacted)

For data on CO2 emissions and electric power generation, see EIA, Monthly Energy Review, October 2017, Tables

12.6 and 7.1, at https://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf.

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

and sells a certain amount of its electricity generation to the grid.79 The state-specific plans

describe the requirements that would apply to affected EGUs.

Q: How many EGUs and facilities are affected by the final rule?

A: Based on data EPA provided in support of its final rule,80 the affected EGU definition applied

to approximately 3,000 EGUs at approximately 1,100 facilities. The number of EGUs and

facilities varies by state.

Q: Does the Clean Power Plan apply to all states and territories?

A: EPA did not establish emission rate goals for Vermont and the District of Columbia, because

they did not have affected EGUs. Although Alaska and Hawaii had targets in EPA’s proposed

rule, in its final rule, EPA stated that Alaska, Hawaii, and the two U.S. territories with affected

EGUs (Guam and Puerto Rico) would not be required to submit state plans on the schedule

required by the final rule, because EPA “does not possess all of the information or analytical tools

needed to quantify” the best system of emission reduction for these areas. In the final rule

preamble, EPA stated it would “determine how to address the requirements of section 111(d) with

respect to these jurisdictions at a later time.”81

Q: What was the deadline under the final rule for submitting state plans to

EPA?

A: Under the final rule as promulgated, states were required to submit to EPA either an initial

plan or final plan by September 6, 2016. If a state submitted an initial plan, the state could seek an

extension from EPA to submit its final plan by September 6, 2018. If EPA granted this extension,

the state would have been required to submit a progress report by September 6, 2017. Because the

rule is currently stayed for the duration of the litigation, these deadlines do not have legal effect

and will likely be delayed if the rule is ultimately upheld.

Q: What are the different options available to states when preparing their

state plans?

A: States have several key decisions to make when crafting their state plans. Perhaps the most

important decision is whether to measure compliance with an emission rate target (pounds of CO2

per MWh) or a mass-based target (tons of CO2). EPA provided both targets in its final rule. If a

state decides to set up an emission (or emission rate) trading system, the trading system would be

compatible only with systems using the same metric. In other words, a rate-based state cannot

trade with a mass-based state.

In addition, the final rule allows for two types of state plans, described by EPA as (1) an

“emission standards” approach and (2) a “state measures” approach. With an emission standards

approach, a state would implement national CO2 emission performance rates (discussed below)

For further details, see EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility

Generating Units,” Final Rule, 80 Federal Register 64715, October 23, 2015.

See EPA, “Data File: Goal Computation Appendix 1-5,” http://www2.epa.gov/cleanpowerplan/clean-power-planfinal-rule-technical-documents.

EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,”

Final Rule, 80 Federal Register 64743, October 23, 2015.

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

directly at the affected EGUs in the state. In contrast, a state measures approach would allow a

state to achieve the equivalent of the national CO2 emission performance rates by using some

combination of federally enforceable standards and elements that would be enforceable only

under state laws (e.g., renewable energy and/or energy efficiency requirements).

Q: Can states join together and submit multi-state plans?

A: States have the option of submitting multi-state plans. The same deadlines apply to multi-state

plans. A multi-state plan would employ either a rate-based or mass-based approach.

Q: What are the national CO2 emission performance rates in the final rule?

A: The final rule establishes uniform national CO2 emission performance rates—measured in

pounds of CO2 per MWh of electricity generation—for each of the two subcategories of EGUs

affected by the rule (Table 1). These subcategories include (1) fossil-fuel-fired electric steam

generating units, of which coal generation accounts for 94%—oil and natural gas contribute the

remainder—and (2) stationary combustion turbines, namely natural gas combined cycle (NGCC)

units.

The national rates are a major change from the proposed rule, which did not include similar

performance rates at the EGU level. As discussed below, the national CO2 emission performance

rates are the underpinnings for the calculations that EPA used to develop state-specific emission

rates and mass-based targets.

Table 1. National CO2 Performance Rates

Pounds of CO2 per Megawatt-hour

2022

2023

2024

2025

2026

2027

2028

2029

2030

Interim

(Average of

2022-2030)

Fossil

steam

units

1,741

1,681

1,592

1,546

1,500

1,453

1,404

1,355

1,304

1,534

1,305

NGCC

units

898

877

855

836

817

798

789

779

770

832

771

Final

(2030)

Source: Prepared by CRS; annual rates from EPA, CO2 Emission Performance Rate and Goal Computation Technical

Support Document for CPP Final Rule, August 2015.

Note: To generate the final rates, EPA used the 2030 rates and rounded up to the next integer.

Q: How did EPA establish the national CO2 emission performance rates?

A: EPA compiled 2012 CO2 emissions and electricity generation data from each affected EGU in

each state. Then EPA divided the states into three regions (see Error! Reference source not

ound.), aggregating the CO2 emission and electricity generation data. Next, EPA applied three

“building blocks” to the aggregated regional data:



Building block 1: EPA applied heat rate improvements to coal-fired EGUs,

improving their overall emission rate. The improvements vary by region from

2.1% to 4.3%.

Building block 2: EPA assumed that NGCC generation would increase to a

specific ceiling, displacing an equal amount of generation from steam units

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions



(primarily coal). Note that in the final rule, EPA applies building block 3 before

building block 2, dampening the impact of building block 2.

Building block 3: EPA projected annual increases in renewable energy

generation, which resulted in corresponding decreases in generation from

affected EGUs. EPA based the future increases on renewable energy generation

increases between 2010 and 2014.

EPA’s building block application produced annual CO2 emission performance rates for steam and

NGCC units in each region. EPA compared the rates in each of the three regions and chose the

least stringent regional rate as the national standard for that particular year for each EGU category

(Table 1).

Figure 5. Electricity Regions in EPA’s Methodology

Source: Reproduced from EPA, Overview of the Clean Power Plan: Cutting Carbon Pollution from Power Plants,

August 2015, http://www.epa.gov/airquality/cpp/fs-cpp-overview.pdf.

Notes: EPA did not establish emission rate goals for Vermont and the District of Columbia because they do not

currently have affected EGUs. Although Alaska and Hawaii have targets in the proposed rule, in its final rule, EPA

stated that Alaska, Hawaii, and the two U.S. territories with affected EGUs (Guam and Puerto Rico) will not be

required to submit state plans on the schedule required by the final rule, because EPA “does not possess all of

the information or analytical tools needed to quantify” the best system of emission reduction for these areas.

EPA stated it will “determine how to address the requirements of section 111(d) with respect to these

jurisdictions at a later time” (EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric

Utility Generating Units,” Final Rule, 80 Federal Register 64743, October 23, 2015).

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Q: How did EPA calculate the state-specific emission rate targets?

A: To generate state-specific emission rate targets, EPA applied the national CO2 emission

performance rates to each state’s baseline (2012) of fossil fuel generation (steam generation vs.

NGCC generation).

For example, in 2012, Arizona’s electricity generation mix included



49% steam generation, and

51% NGCC generation.

To calculate Arizona’s 2030 emission rate target, EPA multiplied the percentage of each

generation type by the corresponding 2030 national CO2 emission performance rate (Table 1):

(49% X 1,305 lbs. CO2/MWh) + (51% X 771 lbs. CO2/MWh) = 1,031 lbs. CO2/MWh

Q: What are the state-specific emission rate targets?

A: Table 2 lists the 2030 emission rate targets for each state and the 2012 emission rate baselines.

In addition, the table lists the implied percentage reductions required to achieve the 2030

emission rate targets compared to the 2012 baselines.

EPA used different formulas to calculate the 2012 baselines in the proposed and final rules. The

final rule baseline includes pounds of CO2 generated from affected EGUs in each state (the

numerator) divided by the electricity generated from these units. The proposed rule baseline

included pounds of CO2 generated from affected EGUs in each state (the numerator) divided by

the electricity generated from these units and “at-risk” nuclear power and renewable energy

generation (the denominator). Including these additional elements in the denominator often

yielded lower baselines compared to the final rule.

Therefore, it is problematic to compare the percentage rate reductions from the proposed rule

with the final rule, because the 2012 baseline calculations changed—sometimes dramatically—in

the final rule. For example, Washington’s 2012 baseline was 756 lbs. CO2/MWh in the proposed

rule. In the final rule, Washington’s 2012 baseline increased by 107% to 1,556 lbs. CO2/MWh.

Table 2. State-Specific Emission Rate Baselines (2012), Emission Rate Targets (2030),

and Percentage Reductions Compared to Baselines

State

2012 Emission Rate

Baseline

2030 Emission Rate

Target

Percentage Change

Compared to Baseline

Pounds of CO2 per megawatt-hour of electricity generation

Alabama

1,518

1,018

33%

Alaska

Not established

Arizona

1,552

1,031

34%

Arkansas

1,816

1,130

38%

California

954

828

13%

Colorado

1,904

1,174

38%

Connecticut

846

786

Delaware

1,209

916

24%

Florida

1,221

919

25%

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Georgia

1,597

1,049

34%

Hawaii

Not established

Idaho

834

771

Illinois

2,149

1,245

42%

Indiana

2,025

1,242

39%

Iowa

2,195

1,283

42%

Kansas

2,288

1,293

43%

Kentucky

2,122

1,286

39%

Louisiana

1,577

1,121

29%

Maine

873

779

11%

Maryland

2,031

1,287

37%

Massachusetts

1,003

824

18%

Michigan

1,928

1,169

39%

Minnesota

2,082

1,213

42%

Mississippi

1,151

945

18%

Missouri

2,008

1,272

37%

Montana

2,481

1,305

47%

Nebraska

2,161

1,296

40%

Nevada

1,102

855

22%

New Hampshire

1,119

858

23%

New Jersey

1,058

812

23%

New Mexico

1,798

1,146

36%

New York

1,140

918

19%

North Carolina

1,673

1,136

32%

North Dakota

2,368

1,305

45%

Ohio

1,855

1,190

36%

Oklahoma

1,565

1,068

32%

Oregon

1,089

871

20%

Pennsylvania

1,642

1,095

33%

Rhode Island

918

771

16%

South Carolina

1,791

1,156

35%

South Dakota

1,895

1,167

38%

Tennessee

1,985

1,211

39%

Texas

1,553

1,042

33%

Utah

1,790

1,179

34%

Virginia

1,366

934

32%

Washington

1,566

983

37%

West Virginia

2,064

1,305

37%

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Wisconsin

1,996

1,176

41%

Wyoming

2,315

1,299

44%

Source: Prepared by CRS; final rule target and baseline data from EPA, CO2 Emission Performance Rate and Goal

Computation Technical Support Document for CPP Final Rule, August 2015, and accompanying spreadsheets,

http://www2.epa.gov/cleanpowerplan/clean-power-plan-final-rule-technical-documents. The interim and final

targets are codified in 40 C.F.R. Part 60, Subpart UUUU, Table 2.

Notes: EPA did not establish emission rate goals for Vermont and the District of Columbia because they do not

currently have affected EGUs. Although Alaska and Hawaii had targets in the proposed rule, in its final rule, EPA

stated that Alaska, Hawaii, and the two U.S. territories with affected EGUs (Guam and Puerto Rico) will not be

required to submit state plans on the schedule required by the final rule, because EPA “does not possess all of

the information or analytical tools needed to quantify” the best system of emission reduction for these areas.

EPA stated it will “determine how to address the requirements of section 111(d) with respect to these

jurisdictions at a later time” (EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric

Utility Generating Units,” Final Rule, 80 Federal Register 64743, October 23, 2015).

Q: How did EPA calculate the state-specific mass-based targets?

A: EPA’s conversion from emission rate targets to mass-based targets involved two steps. First,

EPA multiplied a state’s emission rate target (lbs. CO2/MWh) for a particular year (e.g., 2022) by

the state’s 2012 CO2 generation baseline (MWh). This yields an initial mass-based value for that

year.

Second, EPA determined the amount of renewable energy generation (pursuant to building block

3) that would not be needed to achieve the emission rate targets. This “excess” generation is

available because EPA chose the least stringent of the three regional CO2 performance rates as the

national CO2 performance rate.82 EPA explained:

Due to the nature of the emission performance rate methodology, which selects the

highest of the three interconnection-based values for each source category as the CO 2

emission performance rate, there are cost-effective lower-emitting generation

opportunities quantified under the building blocks that are not necessary for affected

EGUs in the Western and Texas interconnections to demonstrate compliance at historical

generation levels.83

EPA calculated the CO2 emissions associated with this “excess” generation and allocated the CO2

emissions to all of the states based on their 2012 generation, increasing their annual mass-based

targets. As a result, some of the states’ 2030 mass-based targets are higher than their 2012

emission baselines.

EPA based the renewable energy allocation on each state’s share of total electricity generation in

2012 from affected EGUs. For example, in 2012, Florida’s affected EGUs accounted for 8% of

the generation from all affected EGUs nationwide, so Florida received 8% of the excess

renewable energy generation in the mass-based calculation.

For further discussion of these calculations, see EPA, CO2 Emission Performance Rate and Goal Computation

Technical Support Document for the CPP Final Rule, August 2015, https://www.regulations.gov/document?D=EPAHQ-OAR-2013-0602-36850.

EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,”

Final Rule, 80 Federal Register 64822, October 23, 2015.

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Q: What are the state-specific mass-based targets?

A: Table 3 lists the state-specific, mass-based targets from EPA’s final rule. The table compares

the 2030 targets with the 2012 baselines as calculated for the final rule and provides a percentage

change between the two values. Most of the states have emission reduction requirements, but

three states (Connecticut, Idaho, and Maine) have 2030 targets that are higher than their 2012

baselines (as discussed above).

Table 3. State-Specific 2012 CO2 Emission Baselines and 2030 CO2 Emission Targets

Short Tons—Alphabetical by State

State

Alabama

2012 CO2 Emission

Baseline

2030 CO2 Emission

Targets

Percentage

Change

75,571,781

56,880,474

-25%

Alaska

Not established

Arizona

40,465,035

30,170,750

-25%

Arkansas

43,416,217

30,322,632

-30%

California

49,720,213

48,410,120

-3%

Colorado

43,209,269

29,900,397

-31%

Connecticut

6,659,803

6,941,523

Delaware

5,540,292

4,711,825

-15%

Florida

124,432,195

105,094,704

-16%

Georgia

62,843,049

46,346,846

-26%

Hawaii

Not established

Idaho

1,438,919

1,492,856

Illinois

102,208,185

66,477,157

-35%

Indiana

110,559,916

76,113,835

-31%

Iowa

38,135,386

25,018,136

-34%

Kansas

34,655,790

21,990,826

-37%

Kentucky

92,775,829

63,126,121

-32%

Louisiana

44,391,194

35,427,023

-20%

Maine

2,072,157

2,073,942

0.1%

Maryland

20,171,027

14,347,628

-29%

Massachusetts

13,125,248

12,104,747

-8%

Michigan

69,860,454

47,544,064

-32%

Minnesota

34,668,506

22,678,368

-35%

Mississippi

27,443,309

25,304,337

-8%

Missouri

78,039,449

55,462,884

-29%

Montana

19,147,321

11,303,107

-41%

Nebraska

27,142,728

18,272,739

-33%

Nevada

15,536,730

13,523,584

-13%

New Hampshire

4,642,898

3,997,579

-14%

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

State

2012 CO2 Emission

Baseline

2030 CO2 Emission

Targets

Percentage

Change

New Jersey

19,269,698

16,599,745

-14%

New Mexico

17,339,683

12,412,602

-28%

New York

34,596,456

31,257,429

-10%

North Carolina

67,277,341

51,266,234

-24%

North Dakota

33,757,751

20,883,232

-38%

Ohio

102,434,817

73,769,806

-28%

Oklahoma

52,862,077

40,488,199

-23%

Oregon

9,042,668

8,118,654

-10%

Pennsylvania

119,989,743

89,822,308

-25%

Rhode Island

3,735,786

3,522,225

-6%

South Carolina

35,893,265

25,998,968

-28%

South Dakota

5,121,124

3,539,481

-31%

Tennessee

41,387,231

28,348,396

-32%

Texas

251,848,335

189,588,842

-25%

Utah

32,166,243

23,778,193

-26%

Virginia

35,733,502

27,433,111

-23%

Washington

15,237,542

10,739,172

-30%

West Virginia

72,318,917

51,325,342

-29%

Wisconsin

42,317,602

27,986,988

-34%

Wyoming

50,218,073

31,634,412

-37%

Source: Prepared by CRS using data from EPA, CO2 Emission Performance Rate and Goal Computation Technical

Support Document for CPP Final Rule (August 2015). The interim and final targets are codified in 40 C.F.R. Part 60,

Subpart UUUU, Table 3.

Notes: EPA did not establish emission targets for Vermont and the District of Columbia because they do not

currently have affected EGUs. Although Alaska and Hawaii had targets in the proposed rule, in its final rule, EPA

stated that Alaska, Hawaii, and the two U.S. territories with affected EGUs (Guam and Puerto Rico) will not be

required to submit state plans on the schedule required by the final rule, because EPA “does not possess all of

the information or analytical tools needed to quantify” the best system of emission reduction for these areas.

EPA stated it will “determine how to address the requirements of section 111(d) with respect to these

jurisdictions at a later time” (EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric

Utility Generating Units,” Final Rule, 80 Federal Register 64743, October 23, 2015).

Q: Does the Clean Power Plan apply to EGUs on Indian lands?

A: The final rule established emission rate and emission targets for three areas of Indian country:



the Navajo Nation,

the Ute Tribe of the Uintah and Ouray Reservation, and

the Fort Mojave tribe.

The targets (Table 4) are based on two facilities in the Navajo Nation (the Navajo Generating

Station and the Four Corners Power Plant), the South Point Energy Center on the Fort Mojave

Reservation, and the Bonanza Power Plant on the Uintah and Ouray Indian Reservation.

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Table 4. Emission Rate and Emission Targets for Areas of Indian Country

2012 CO2

Emission

Rate Baseline

2030 CO2

Emission Rate

Target

Percentage

Change

2012 CO2

Emission

Baseline

2030 CO2

Emission

Targets

Percentage

Change

858

771

-10%

583,530

588,519

Navajo

Nation

2,121

1,305

-38%

31,416,873

21,700,586

-31%

Ute Tribe

2,145

1,305

-39%

3,314,097

2,263,431

-32%

Area of

Indian Land

Fort Mojave

Tribe

Source: Prepared by CRS. The targets are codified in 40 C.F.R. Part 60, Subpart UUUU, Table 2 (emission

rates) and Table 3 (mass-based).

EPA stated that tribes have “the opportunity, but not the obligation,” to establish and submit a

plan (after obtaining the necessary approval from EPA) to meet their emission rate targets. If a

tribe does not seek approval 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.”84

On October 23, 2015, in addition to finalizing the CPP and NSPSs for EGUs, EPA proposed a

rule for a federal plan, which would be implemented by EPA in states that do not submit a

satisfactory state implementation plan.85 In the federal plan rule, EPA proposed “to find that it is

necessary or appropriate to regulate affected EGUs in each of the three areas of Indian country

that have affected EGUs under the proposed federal plan.”86 Therefore, EPA would develop and

implement the federal plan for EGUs in the relevant Indian lands, unless the tribal governments

received EPA approval to submit their own plans to meet their emission targets. However,

pursuant to President Trump’s Executive Order 13783, EPA withdrew the federal plan proposed

rule on April 3, 2017.87

Although EPA withdrew the proposed federal plan, the targets in Indian lands established by the

final rule remain. If the final rule is upheld in court, the agency would need to develop and

finalize a new federal plan if it determines that “a plan is necessary or appropriate” if a tribe does

not seek approval to submit its own plan.

Q: Would states and companies that have already reduced GHG emissions

receive credit for doing so?

A: States would not receive “credit” in their emission rate or emission targets for emission

reduction measures already taken. Whether individual power companies would receive some type

of credit would 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 would implement to reach its goal.

EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,”

Final Rule, 80 Federal Register 64664, October 23, 2015.

EPA, “Federal Plan Requirements for Greenhouse Gas Emissions from Electric Utility Generating Units Constructed

on or Before January 8, 2014; Model Trading Rules; Amendments to Framework Regulations,” Proposed Rule, 80

Federal Register 64966, October 23, 2015.

EPA, “Federal Plan Requirements for Greenhouse Gas Emissions from Electric Utility Generating Units Constructed

on or Before January 8, 2014; Model Trading Rules; Amendments to Framework Regulations,” Proposed Rule, 80

Federal Register 65033, October 23, 2015.

EPA, “Withdrawal of Proposed Rules,” 82 Federal Register 16144, April 3, 2017.

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

EPA used 2012 data to prepare the national CO2 emission performance rates and each state’s

emission rate and emission targets. The final rule does not have a process for providing credit for

emissions reductions made prior to 2012. EPA contended that states that began action prior to

2012, including a shift to less carbon-intensive energy sources or energy efficiency

improvements, would be “better positioned” to meet state-specific emission rate goals.88

However, some stakeholders would likely argue that the 2012 demarcation is unfair to states

where investments in substantial amounts of low-carbon generation technology and/or energy

efficiency improvements were made prior to 2012.

Q: How does EPA’s Clean Power Plan interact with existing GHG emission

reduction programs in the states, namely the Regional Greenhouse Gas

Initiative and California’s climate policies?

A: A number of U.S. states have already required 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 Initiative89—and California.90

The Regional Greenhouse Gas Initiative (RGGI) is a cap-and-trade system involving nine states

that took effect in 2009.91 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 applies to multiple GHGs from multiple economic sectors,

covering approximately 85% of California’s GHG emissions. In addition, California has other

policies and regulations that address GHG emissions directly and indirectly.92

EPA allows states considerable flexibility in meeting their emission rates or emission targets. 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.

Both California and the RGGI states have taken action to extend the emission caps in their

respective programs beyond 2020. In July 2017, California enacted AB 398, which extends the

state’s cap-and-trade program through 2030.93 The legislation received a two-thirds vote, which

may help avoid subsequent legal challenges.94

EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,”

Final Rule, 80 Federal Register 64897, October 23, 2015.

See CRS Report R41836, The Regional Greenhouse Gas Initiative: Lessons Learned and Issues for Congress, by

(name redacted)

. See also http://www.rggi.org/.

See http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm.

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.

More details are available at http://www.climatechange.ca.gov/.

For more details, see this Press Release, https://www.gov.ca.gov/news.php?id=19891.

Some stakeholders challenged the original legislation (AB 32) in state court. They argued the program’s emission

auction represented an unconstitutional tax, which requires a two-thirds vote in the legislature. After lower court losses,

stakeholders sought a review from the California Supreme Court. In June 2017, the California Supreme Court denied a

petition for review.

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

In August 2017, RGGI state officials announced an initial agreement to extend the RGGI program

through 2030, with additional emission reductions.95 The agreement is still in its early stages and

will undergo a public comment process. RGGI states would then need to update their respective

statutes or regulations to implement the program changes. In addition, Virginia has taken recent

steps to potentially join the regional partnership, releasing a draft proposal of emission reduction

regulations in November 2017 that would link with the RGGI program.96

Q: What role is there for “outside-the-fence” emission reductions?

A: The respective roles of actions that individual power plants take (i.e., “inside the fence”

actions, such as the adoption of pollution control devices or fuel switching) versus actions by

other actors, including energy consumers (“outside the fence” actions) have been the subject of

much of the controversy surrounding the CPP. “Outside-the-fence” emission reductions play a

central role in the methodology EPA used to establish the national CO2 emission performance

rates, which, in turn, provide the foundation for state-specific targets. In particular, building block

3 (discussed above) includes incremental increases of renewable energy generation, with

corresponding decreases in electricity generation by fossil-fuel-fired units. Renewable energy

appears to play a greater role in the final rule’s methodology than in the proposed rule. However,

the final rule omits building block 4 from the proposed rule, which included energy efficiency

improvements other than by the fossil fuel-fired units.

Although outside-the-fence activities were a major component of EPA’s target calculations, the

degree to which outside-the-fence emission reductions would be used would depend on the

policies and requirements states implement through their state plans.

Q: How would new fossil-fuel-fired power plants and their resulting

electricity generation and emissions factor into a state’s emission rate or

emission calculations?

A: In EPA’s final rule, new EGUs are treated differently under rate-based and mass-based plans.

Under a mass-based approach, states have the option of including new fossil-fuel-fired sources in

their emission reduction plans. In its final rule, EPA provided mass-based emission targets that

include projections of new sources (described by EPA as a “new source complement”).97 This

inclusion would facilitate emissions trading within the state and with other states. These new

sources would remain subject to the performance standards under CAA Section 111(b).98

In its proposed rule, EPA considered whether states could include new NGCC units in their

emission rate calculations. In the final rule, EPA specifically prohibited states from including new

NGCC units as a means of directly adjusting the state’s emission rate. However, if a new NGCC

were to effectively replace existing electricity generation from a coal-fired EGU, the state’s

emission rate would likely decrease with the removal of the coal-fired unit.99

See http://www.rggi.org/docs/ProgramReview/2017/08-23-17/Announcement_Proposed_Program_Changes.pdf.

For more information, see http://www.deq.virginia.gov/Programs/Air/GreenhouseGasPlan.aspx.

For further details on how EPA calculated the new source complement emissions, see EPA, New Source

Complements to Mass Goals, Technical Support Document for CPP Final Rule, August 2015,

https://www.regulations.gov/document?D=EPA-HQ-OAR-2013-0602-37110.

See EPA, “Standards of Performance for Greenhouse Gas Emissions for New, Modified, and Reconstructed

Stationary Sources; Electric Utility Generating Units,” Final Rule, 80 Federal Register 64510, October 23, 2015.

For a discussion of this issue, see EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources:

(continued...)

Congressional Research Service

EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Q: What role does nuclear power play in the Clean Power Plan rule?

A: EPA modified its treatment of nuclear power in the final rule. In its proposed rule, EPA

factored “at risk” nuclear power (estimated at 5.8% of existing capacity) into the state emission

rate methodology. As a result, states would have had an incentive to maintain the at-risk nuclear

power generation so their emission rates would not increase (all else being equal). The final rule

does not include at-risk nuclear generation in its building block calculations.

In addition, in its final rule, EPA decided not to include under-construction nuclear power

capacity in the emission rate calculations. Including the estimated generation from these

anticipated units in the emission rate equation would have substantially lowered the emission rate

targets in Georgia, South Carolina, and Tennessee. If the final rule had retained this feature, and

these nuclear units did not enter service, these three states would likely have more difficulty

achieving their emission rate goals.100

EPA clarified that the final rule would allow the generation from under-construction units, new

nuclear units, and capacity upgrades to help sources meet emission rate or emission targets.

Q: What role does energy efficiency play in the Clean Power Plan final rule?

A: In EPA’s proposed rule, demand-side energy efficiency (EE) improvements were part of the

agency’s state-specific emission rate target calculations (“building block 4”). However, in its final

rule, EPA did not include demand-side EE improvements as part the agency’s national CO2

emission performance rate calculations, which underlie the state-specific targets.

Although EPA removed demand-side EE assumptions from its target calculations, states may

choose to employ EE improvement activities as part of their plans to meet their targets. In

particular, the final rule included a new voluntary program that provided incentives for early

investments (in 2020 and 2021) in EE programs in low-income communities (as discussed

below).

In addition, in its 2015 Regulatory Impact Analysis (RIA) for the final rule, EPA assumed that EE

will play an important role in meeting compliance obligations:

[EE] is a highly cost-effective means for reducing CO2 from the power sector, and it is

reasonable to assume that a regulatory requirement to reduce CO 2 emissions will

motivate parties to pursue all highly cost-effective means for making emission reductions

accordingly, regardless of what particular emission reduction measures were assumed in

determining the level of that regulatory requirement. 101

Q: What role does biomass play in the Clean Power Plan?

A: In its final rule, EPA would allow states to use “qualified biomass” as a means of meeting

state-specific reduction requirements. EPA defined qualified biomass as a “feedstock that is

demonstrated as a method to control increases of CO2 levels in the atmosphere.”102 This appears

(...continued)

Electric Utility Generating Units,” Final Rule, 80 Federal Register 64903, October 23, 2015.

100

For a discussion of the financial challenges facing the nuclear power industry, see CRS Report R44715, Financial

Challenges of Operating Nuclear Power Plants in the United States, by (name redacted) and (name redacted)

101

U.S. Environmental Protection Agency, Regulatory Impact Analysis for the Clean Power Plan Final Rule, October

23, 2015, at https://www.regulations.gov/document?D=EPA-HQ-OAR-2013-0602-37105 (hereinafter, “2015 RIA”).

102

Defined in the final rule regulations (40 C.F.R. §60.5880); EPA, “Carbon Pollution Emission Guidelines for

(continued...)

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

to be a narrower approach than was taken in the proposed rule. Also, EPA required additional

accounting and reporting requirements if a state decides to use qualified biomass. The agency

gave some indication as to which biomass types may qualify.103

Q: What is the Clean Energy Incentive Program?104

A: The Clean Energy Incentive Program (CEIP) is a voluntary program that would complement

the CPP. The CEIP encourages states to support energy efficiency measures and renewable energy

projects before the first CPP compliance obligations are scheduled to take effect in 2022. In order

to participate in the CEIP, states would need to include particular design elements in their final

state plans.

EPA established the framework of the CEIP in its CPP final rule in 2015. EPA issued a proposed

rule for the CEIP that was published in the Federal Register on June 30, 2016.105 The proposed

rule provided additional details, clarified certain elements that were previously outlined, and

altered some of the program eligibility requirements. In response to President Trump’s Executive

Order 13783 to review and potentially revise the CPP, EPA withdrew the CEIP 2016 proposed

rule on April 3, 2017.106 The following discussion describes the CEIP as established in the CPP

2015 final rule.

The CEIP would create a system to award credits to energy efficiency projects in low-income

communities and renewable energy projects (only wind and solar) in participating states. The

credits would take the form of emission rate credits (ERCs) or emission allowances, depending

on whether a state uses an emission rate or mass-based target, respectively. The credits could be

sold to or used by an affected emission source to comply with the state-specific requirements

(e.g., emission rate or mass-based targets).

Renewable energy projects would receive one credit (either an allowance or ERC) from the state

and one credit from EPA for every two MWh of solar or wind generation. EE projects in lowincome communities would receive double credits: For every two MWh of avoided electricity

generation, EE projects will receive two credits from the state and two credits from EPA. EPA

would match up to the equivalent of 300 million short tons in credits during the CEIP program

life. The amount of EPA credits potentially available to each state participating in the CEIP

depends on the relative amount of emission reduction each state is required to achieve compared

to its 2012 baseline. Thus, states with greater reduction requirements would have access to a

greater share of the EPA credits.

To generate the credits, states would effectively borrow from their mass-based or rate-based

compliance targets for the interim 2022-2029 compliance period. EPA would provide its share of

credits from a to-be-established reserve.

(...continued)

Existing Stationary Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64662, October 23,

2015.

103

For further information, see CRS In Focus IF10280, The Clean Power Plan (CPP): The Treatment of Biomass, by

(name redacted).

104

For more information, see CRS Report R44607, EPA’s Clean Energy Incentive Program: Background and Legal

Developments, by (name redacted) and (name redacted) .

105

EPA, “Clean Energy Incentive Program Design Details,” 81 Federal Register 42940, June 30, 2016.

106

EPA, “Withdrawal of Proposed Rules,” 82 Federal Register 16144, April 3, 2017.

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Q: How did the final Clean Power Plan differ from the proposed rule?

A: EPA’s 2015 final rule was different from EPA’s 2014 proposed rule in multiple respects. A key

change was the establishment of national CO2 emission performance rates for the sources affected

by the rule: fossil-fuel-fired electric steam generating units and stationary combustion turbines.

EPA used what it called “building blocks” to derive the national emission performance rates and

state-specific targets based on the national rates. The final rule’s state-specific targets differed

from those in the proposed rule, because in the final rule, EPA applied its building block

assumptions to regional-level data to create regional CO2 emission performance rates. These

regional rates led to national rates, which were then used to produce state-specific emission rate

and emission targets. By contrast, in the proposed rule, EPA applied building blocks to state-level

data, yielding different outcomes.

In addition, EPA modified its target creation methodology (e.g., building blocks) in the final rule.

Key modifications included adjustments to



renewable energy,

natural gas combined cycle (NGCC) displacement of coal-fired electricity

generation,

heat rate improvements at coal-fired units,

energy efficiency,

nuclear power, and

state-specific 2012 baselines.

These methodological changes impacted only the state-specific targets. States can choose to use a

variety of mechanisms to meet their targets, including, but not limited to, the emission reduction

activities assumed in EPA’s methodology.

In addition, state compliance with the final rule begins in 2022 instead of 2020 under the

proposed rule. The final rule has additional compliance options available to states, particularly in

the form of state plans.

Q: If the Clean Power Plan is upheld and not repealed, what would be the next

steps in its implementation?

A: EPA cannot enforce the rule while it is stayed, pursuant to Supreme Court order, for the

duration of the litigation over the rule.107

The final rule, as promulgated, set a deadline of September 6, 2016, for each state to submit a

State Implementation Plan to EPA.108 In lieu of a completed plan, the final rule authorized a state

to make an initial submittal by that date and request up to two additional years to complete its

submission. For the extension of time to be granted, the final rule required the initial submittal to

address three components sufficiently to demonstrate that the state is able to submit a final plan

by September 6, 2018:

107

See Order in Pending Case, West Virginia v EPA (S. Ct. No. 15A773, February 9, 2016), available at

https://www.supremecourt.gov/orders/courtorders/020916zr_21p3.pdf.

108

As noted below in “Q: What happens if a state fails to submit an adequate plan by the appropriate deadline?,” EPA

cannot compel a state to submit a plan, but the statute authorizes EPA to impose a federal plan on the state if a state

does not submit a satisfactory plan by EPA’s deadline.

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

1. an identification of the final plan approach or approaches under consideration,

including a description of progress made to date;

2. an appropriate explanation for why the state needs additional time to submit a

final plan; and

3. a demonstration of how the state has been engaging with the public, including

vulnerable communities, and a description of how it intends to meaningfully

engage with community stakeholders during the additional time.

In light of the stay, these near-term deadlines lack legal effect. If the rule is ultimately upheld or

remanded back to EPA, but is not repealed, then initial compliance deadlines would likely be

extended until a revised rule is finalized.109 Following submission of final plans, EPA would

review the submittals to determine whether they are approvable.

The interim compliance period for the rule, as promulgated, begins in 2022, although it is

possible that this compliance date could be delayed as well if the rule is ultimately upheld and not

repealed. EPA set an eight-year interim period that begins in 2022 and runs through 2029 and is

separated into three steps (2022-2024, 2025-2027, and 2028-2029), each with its own interim

goal. Affected EGUs would have to meet each of the step 1, 2, and 3 CO2 emission performance

rates or follow an EPA-approved emissions reduction trajectory designed by the state itself for the

eight-year period from 2022 to 2029. The final rule, as promulgated, requires compliance with the

state’s final goal by 2030.

Q: What incentives are there for early compliance?

A: In general, the CPP states

Incremental emission reduction measures, such as RE [renewable energy] and demandside EE, can be recognized as part of state plans, but only for the emission reductions

they provide during a plan performance period. Specifically, this means that measures

installed in any year after 2012 are considered eligible measures under this final rule, but

only the quantified and verified MWh of electricity generation or electricity savings that

they produce in 2022 and future years may be applied toward adjusting a CO 2 emission

rate.110

As noted earlier, however, the CPP provided incentives for states to adopt measures to reduce

emissions in 2020 and 2021 under the CEIP. Under the CEIP, EPA would provide credits against

CPP requirements for wind and solar projects that commence construction after the date that a

state submits its final plan to EPA and that generate metered electricity in 2020 and 2021. EPA

would provide double credits for EE measures that result in reducing electricity consumption in

low-income communities in participating states in the same two years.111

109

See, for example, EPA, “Rulemaking to Amend Dates in Federal Implementation Plans Addressing Interstate

Transport of Ozone and Fine Particulate Matter,” Interim Final Rule, 79 Federal Register 71663, December 3, 2014

(delaying compliance deadlines after court lifted stay of rule and granting EPA motion to toll deadlines for three years,

reflecting length of the litigation); Michigan v. EPA, No. 98-1497 (D.C. Cir. June 22, 2000) (order lifting stay of a rule

relating to interstate transport of air pollution and extending compliance deadlines for State Implementation Plan

submissions required by the rule for the same number of days that the stay had been in effect).

110

EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,”

Final Rule, 80 Federal Register 64896, October 23, 2015.

111

For additional information, see “Q: What is the Clean Energy Incentive Program?” above.

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Q: If the Clean Power Plan is upheld and goes into effect, 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, if a state fails 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 a federal

implementation plan (FIP) when a state fails to submit a state implementation plan to achieve a

National Ambient Air Quality Standard (NAAQS).112 EPA proposed a model FIP on August 3,

2015 (which appeared in the Federal Register on October 23, 2015), but withdrew it as directed

by Executive Order 13783.113 If the CPP is upheld in court and is not repealed, EPA would need

to re-propose a FIP for states that fail to submit an approvable plan to EPA.

Q: What would the proposed FIP have required?

A: Just as EPA cannot compel a state to submit a state plan, it also cannot compel a state to meet

its average emission targets. FIPs, therefore, would require compliance by individual EGUs in the

affected state. The proposed FIP would set either emission rates or emission limits for affected

EGUs. According to EPA, the stringency of the federal plan would be the same as the national

CO2 emission performance rates specified in the CPP.114 In addition, the FIP would establish a

trading program that could be used by affected EGUs to meet those limits. If the agency chooses

to implement a mass-based program, the proposal envisions the allocation of allowances to

individual EGUs based on their historical emissions during the years 2010-2012.115

Although the proposed rule set forth both a mass-based and a rate-based option for the proposed

trading program, the agency stated that it intended to finalize a single approach—that is, either a

rate-based or a mass-based approach—in all FIPs “in order to enhance the consistency of the

federal trading program, achieve economies of scale through a single, broad trading program,

ensure efficient administration of the program, and simplify compliance planning for affected

EGUs.”116 While accepting comments on both approaches, the agency appeared to be leaning

toward a mass-based option for use in the FIPs, stating that it

would be more straightforward to implement compared to the rate-based trading

approach, both for industry and for the implementing agency. The EPA, industry, and

many state agencies have extensive knowledge of and experience with mass-based

trading programs. The EPA has more than two decades of experience implementing

federally-administered mass-based emissions budget trading programs including the Acid

Rain Program (ARP) sulfur dioxide (SO2) trading program, the Nitrogen Oxides (NOX)

112

CAA §110(c); 42 U.S.C. §7410(c).

See EPA, “Federal Plan Requirements for Greenhouse Gas Emissions from Electric Utility Generating Units

Constructed on or Before January 8, 2014; Model Trading Rules; Amendments to Framework Regulations,” Proposed

Rule, 80 Federal Register 64966, October 23, 2015. EPA, “Withdrawal of Proposed Rules,” 82 Federal Register

16144, April 3, 2017.

114

See the proposed FIP, page 64970.

115

For a discussion of the proposed allowance allocation system, see EPA, “Allowance Allocation Proposed Rule

Technical Support Document (TSD),” August 2015, http://www2.epa.gov/sites/production/files/2015-11/documents/

tsd-fp-allowance-allocations.pdf.

116

EPA, “Federal Plan Requirements for Greenhouse Gas Emissions from Electric Utility Generating Units

Constructed on or Before January 8, 2014; Model Trading Rules; Amendments to Framework Regulations,” Proposed

Rule, 80 Federal Register 64970, October 23, 2015.

113

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

Budget Trading Program, CAIR, and CSAPR. The tracking system infrastructure exists

and is proven effective for implementing such programs. 117

EPA noted that, under its proposed FIP rule, states with FIPs could still participate in the

implementation of the program under these conditions:



After a federal plan is put in place for a particular state, the state would still be

able to submit a plan, which, if approved, would allow the state and its EGUs to

exit the federal plan.

States would be allowed to take delegation of administrative aspects of the

federal plan in order to become the primary implementers, or they could submit

partial state plans in order to take over the implementation of a portion of a

federal plan. For example, the states could replace the federal plan’s allowancedistribution provisions with their own allowance-distribution provisions.

States operating under a federal plan would be allowed to adopt complementary measures outside

of that plan to facilitate compliance and lower costs to the benefit of power generators and

consumers.

Current Status/Next Steps

Q: What is the current status of the Clean Power Plan?

A: Although the CPP is a final rule and set a deadline of September 6, 2016, for each state to

submit a State Implementation Plan to EPA,118 EPA was unable to enforce that deadline because

the rule was stayed, pursuant to Supreme Court order, for the duration of the litigation over the

rule.119 The U.S. Court of Appeals for the District of Columbia heard oral arguments in the case in

September 2016, but agreed on April 28, 2017, to an EPA request to hold the case in abeyance

while the agency conducts the review required by Executive Order 13783.120

On October 10, 2017, pursuant to that review, EPA proposed to repeal the CPP.121 The proposed

repeal is subject to public comment until January 16, 2018. Two days of public hearings on the

proposal were held November 28 and 29, 2017, in Charleston, West Virginia. The court further

extended the abeyance of the litigation while EPA proceeds to repeal the CPP.122

Q: What is the basis of EPA’s proposed CPP repeal?

A: EPA proposed to repeal the Clean Power Plan based on a change in its legal interpretation of

Section 111(d) of the Clean Air Act.123 In its new interpretation, the agency maintains that the

117

Ibid.

As noted below in “Q: What happens if a state fails to submit an adequate plan by the appropriate deadline?,” EPA

cannot compel a state to submit a plan, but the statute authorizes EPA to impose a federal plan on the state if a state

does not submit a satisfactory plan by EPA’s deadline.

119

See Order in Pending Case, West Virginia v. EPA (S. Ct. No. 15A773, February 9, 2016), available at

https://www.supremecourt.gov/orders/courtorders/020916zr_21p3.pdf.

120

Exec. Order No. 13783, § 4(b)(ii), 82 Federal Register 16093 (March 31, 2017) (signed on March 28, 2017).

121

Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,

82 Fedister Register 48035 (October 16, 2017).

122

Order, West Virginia v. EPA, No. 15-1363 (D.C. Cir. November 9, 2017).

123

82 Federal Register at 48038-43. For additional discussion of EPA’s legal reasoning, see CRS Legal Sidebar

(continued...)

118

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CPP exceeded the agency’s 111(d) authority by requiring compliance through activities that are

“outside the fence line” of the power plants whose emissions are the rule’s targets. For example,

the rule effectively assumes that electric power producers would reduce CO2 emissions by

substituting lower carbon or non-carbon sources of electricity for some of the fossil-fueled

generation whose emissions it seeks to reduce. The lower carbon sources might be wind or solar

power units located miles away from the coal-fired unit whose emissions are to be reduced. The

proposed repeal states that such outside-the-fence-line measures are not authorized by Section

111; it maintains that the agency’s historical practice has been to interpret the authority in Section

111 to allow only measures that can be applied “at and to an individual source” of pollution.124

Q: What are the next steps after the closing of the public comment period?

A: Following the public comment period, a repeal of the CPP could be promulgated. Like the

proposal to repeal the CPP, the promulgated repeal would need to be accompanied by a statement

of basis and purpose.125 It would also require an explanation of the reasons for any major changes

from the proposal. The promulgated repeal must also be accompanied by a response to each of

the significant comments, criticisms, and new data submitted in written or oral presentations

during the comment period. The promulgated repeal may not be based (in part or whole) on any

information or data which has not been placed in the docket as of the date of promulgation.

Q: Would repeal of the CPP be subject to judicial review?

A: In the case of review of any action of the Administrator to which subsection 307(d) of the

Clean Air Act applies, including repeal of a rule, the U.S. Court of Appeals for the D.C. Circuit

may reverse any such action found to be arbitrary, capricious, an abuse of discretion, or otherwise

not in accordance with law, or without observance of the procedures required by law, if the failure

to observe such procedure is arbitrary or capricious.126

Q: Is EPA considering a replacement for the CPP?

A: Although the agency has proposed to repeal the Clean Power Plan, it did not propose repeal of

the GHG “endangerment finding,” the 2009 agency finding that emissions of CO2 and other

GHGs endanger public health and welfare.127 Without addressing this finding, the agency appears

to have a continuing obligation to limit emissions of CO2 from power plants.128 Thus, in addition

to the proposed repeal of the CPP, on December 18, 2017, EPA issued an Advance Notice of

Proposed Rulemaking (ANPRM) to solicit information on whether it is appropriate to issue

(...continued)

LSB10016, EPA Proposes to Repeal the Clean Power Plan, by (name redacted)

124

For additional discussion of EPA’s legal reasoning, see CRS Legal Sidebar LSB10016, EPA Proposes to Repeal the

Clean Power Plan, by (name redacted)

125

For additional information on the legal requirements to repeal a regulation, see CRS Report R41546, A Brief

Overview of Rulemaking and Judicial Review, by (name redacted)

126

42 U.S.C. §7607(b), (d)(9).

127

See EPA, “Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the

Clean Air Act,” Final Rule, 74 Federal Register 66496, December 15, 2009. EPA’s “endangerment finding” was

upheld by the Supreme Court in Util. Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014).

128

For additional information on EPA’s obligation to regulate CO2 emissions from power plants, see CRS Legal

Sidebar LSB10016, EPA Proposes to Repeal the Clean Power Plan, by (name redacted)

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

another rule to replace the CPP and if so, in what form and scope.129 EPA will take public

comment on the notice for 60 days following its publication in the Federal Register.

Costs and Benefits of the Clean Power Plan

Q: What role did 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 NSPSs and related emission guidelines for existing sources of pollution. Section

111(d)(1) also states that the regulations shall permit the states “to take into consideration, among

other factors, the remaining useful life of the existing source to which such standard applies.”

In addition, EPA is required by Executive Order 12866 to provide a cost-benefit analysis when it

proposes or promulgates economically significant rules. The CPP is an economically significant

rule and was therefore subject to the executive order. E.O. 12866 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.”130

The agency’s 2015 RIA, which it prepared to comply with the executive order, is available on the

agency’s website.131

The proposed repeal of the CPP is also an economically significant rule subject to E.O. 12866.

EPA prepared a new Regulatory Impact Analysis that summarizes the costs and benefits of

repealing the rule.132

Q: What were EPA’s estimates of the costs of the final rule?

A: The cost of the rule would depend on whether states adopt a rate-based or a mass-based

approach to compliance, among other factors. In EPA’s 2015 analysis, the cost associated with a

mass-based approach is generally less than that of the rate-based: EPA estimated the annual

incremental compliance cost for the mass-based approach to be $1.4 billion in 2020, $3.0 billion

in 2025, and $5.1 billion in 2030. The comparable figures for the rate-based costs were $2.5

billion in 2020, $1.0 billion in 2025, and $8.4 billion in 2030. Because states would generally

determine how to comply with the goals established by the final rule, EPA referred to these cost

estimates as “illustrative” and noted that they “do not represent the full suite of compliance

flexibilities states may ultimately pursue.”133 EPA described the cost estimates as including “the

net change in the annualized cost of capital investment in new generating sources and heat rate

improvements at coal-fired steam-generating units, the change in the ongoing costs of operating

129

The ANPRM was released on December 18, 2017. A copy of the document and an EPA Fact Sheet can be found at

https://www.epa.gov/stationary-sources-air-pollution/electric-utility-generating-units-advance-notice-proposed.

130

Executive Order 12866, “Regulatory Planning and Review,” signed September 30, 1993, at

https://www.archives.gov/files/federal-register/executive-orders/pdf/12866.pdf.

131

U.S. Environmental Protection Agency, Regulatory Impact Analysis for the Clean Power Plan Final Rule, October

23, 2015, at https://www.regulations.gov/document?D=EPA-HQ-OAR-2013-0602-37105.

132

U.S. EPA, Regulatory Impact Analysis for the Review of the Clean Power Plan: Proposal, October 2017

(hereinafter, “2017 RIA”), at https://www.epa.gov/sites/production/files/2017-10/documents/ria_proposed-cpprepeal_2017-10_0.pdf.

133

2015 RIA, p. ES-9.

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

pollution controls, shifts between or amongst various fuels, demand-side energy efficiency

measures, and other actions associated with compliance.”134

Q: What other estimates of the Clean Power Plan’s cost are there?

A: On November 9, 2015, the American Coalition for Clean Coal Electricity, an industry group,

released a study of the CPP’s impacts prepared by NERA Economic Consulting. The study

concluded that the annual cost of compliance would range from $29 billion to $39 billion in the

period 2022-2033 and that 40 states would see average electricity price increases of 10% or more

under at least one of the scenarios it modeled.135 A study released by the National Mining

Association projected sharp increases in the cost of both electricity and natural gas as a result of

the rule, with a cumulative increase in wholesale electricity costs of $214 billion between 2022

and 2030.136

Others, including electric power producers and regional transmission organizations, have argued

that it is too early to arrive at cost estimates.137 Much would depend on decisions to be made by

the states as to how they would structure their regulatory programs and on projections of the cost

of natural gas, coal, renewable power, and end-use efficiency measures between now and 2030.

As noted below, EPA has revised its estimates of the costs and benefits of the rule in the RIA that

accompanies the proposed repeal.

Q: What were the benefits EPA estimated for the Clean Power Plan?

A: In the preamble to the final rule, EPA cited monetized climate benefits of the rule to be $20

billion in 2030 and the air pollution health co-benefits of the rule to be an additional $12 billion to

$34 billion (all estimates in 2011 dollars).138 The agency used global estimates of the social cost

of carbon (SCC)139 to estimate the value of climate benefits expected under the CPP. The SCC is

134

2015 RIA, p. ES-9.

NERA Economic Consulting, Energy and Consumer Impacts of EPA’s Clean Power Plan, prepared for the

American Coalition for Clean Coal Electricity, November 7, 2015, http://www.americaspower.org/wp-content/uploads/

2015/11/NERA-CPP-Final-Nov-7.pdf.

136

Energy Ventures Analysis, EPA’s Clean Power Plan: An Economic Impact Analysis, prepared for the National

Mining Association, November 17, 2015, http://nma.org/index.php/press-releases-2013/2376-clean-power-plan-willadd-214-billion-to-wholesale-electricity-prices.

137

See, for example, ClimateWire, “Experts Say Accurate Clean Power Plan Cost Estimate Won't Arrive for Years,”

November 30, 2015. The article cites officials at the two largest regional transmission organizations, PJM

Interconnection and Midcontinent Independent System Operator, among others.

138

Each of these estimates used a 3% discount rate (EPA, “Carbon Pollution Emission Guidelines for Existing

Stationary Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64680-64681, October 23,

2015). Discount rates reflect the preference of most people to have money now rather than in the future. Thus, they

discount the value of future benefits derived from the rule. Besides the 3% discount rate, EPA estimated the climate

benefits using three other discount rates: 2.5%, 5%, and “the 95th percentile at a 3% discount rate.” Estimates of the

climate benefits ranged from $6.4 billion to $61 billion in 2030, depending on which of these discount rates was used

(80 Federal Register 64934).

139

Estimates were developed by an interagency working group. See Interagency Working Group on Social Cost of

Carbon, with participation by Council of Economic Advisers, Council on Environmental Quality, Department of

Agriculture, Department of Commerce, Department of Energy, Department of Transportation, Domestic Policy

Council, Environmental Protection Agency, National Economic Council, Office of Management and Budget, Office of

Science and Technology Policy, and Department of the Treasury, “Technical Support Document: Technical Update of

the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866,” May 2013, (revised July

2015), https://obamawhitehouse.archives.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.

135

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an estimate of the monetary value of impacts from CO2 emission changes, including net changes

in agricultural productivity and human health, property damage from increased flood risk, and

changes in energy system costs, such as reduced costs for heating and increased costs for air

conditioning. The SCC estimates that EPA used in its analysis of the CPP final rule have since

been withdrawn by E.O. 13783.140 As noted below, in proposing to repeal the CPP, EPA has

developed a set of new SCC values that resulted in notably different estimates of the monetary

value of changes in CO2 emissions.

The air pollution health co-benefits of the CPP reflect reduced exposure to fine particulate matter

(PM2.5) and ozone. The health co-benefit estimate was expressed as a range. The range primarily

reflected the use of concentration-response functions from different epidemiology studies.141

Health benefits reflected monetized estimates for the contiguous United States, not the rest of the

world. A reduction in premature fatalities each year accounted for over 98% of the total

monetized health co-benefits in the 2015 RIA.

With estimated compliance costs rising to a maximum of $8.4 billion in 2030, EPA’s 2015 RIA

expected that the CPP would yield net benefits of $24 billion to $49 billion in 2030.142

EPA did not monetize other expected co-benefits of this rule in the 2015 RIA, including reduced

morbidity from exposure to nitrogen dioxide, sulfur dioxide, and methylmercury and reduced

effects from acid deposition. EPA also did not quantify pollution effects on ecosystems or

visibility.143

Q: What are the estimated costs and benefits of the proposed repeal of the

CPP?

A: Broadly speaking, the benefits of repealing a rulemaking are avoiding the costs that would

have been incurred through implementing the rule; the costs of the repeal are forgoing the

benefits that would have resulted from rule implementation. EPA defined the benefits of the

proposed CPP repeal as the “avoided compliance costs” (i.e., the compliance costs that would

have been incurred to implement the CPP); EPA also refers to this category as “cost savings.”

Likewise, EPA defined the costs of the proposed CPP repeal as the forgone reductions in CO2 and

non-GHG emissions and the associated forgone climate benefits and health co-benefits,

respectively.

EPA estimated the benefits and costs of the proposed repeal based on the power sector modeling

it conducted in 2015 and under the same illustrative scenarios—mass-based and rate-based—but

applied several methodological changes. These modifications include the application of new

estimates of the social cost of carbon, changing the accounting treatment of demand-side energy

efficiency savings, and using thresholds to exclude portions of the forgone health co-benefits

from the benefit-cost comparison. Based on this approach, EPA reported benefits of the proposed

repeal in the year 2030 under the mass-based scenario ranging from about $25 billion to $31

140

For additional information on the SCC and issues following the withdrawal, see CRS In Focus IF10625, Social

Costs of Carbon/Greenhouse Gases: Issues for Congress, by (name redacted).

141

To a lesser extent, it reflected the overlapping benefit ranges that EPA estimated for rate-based and mass-based

compliance approaches. The mass-based estimate ranged from $12 billion to $28 billion in 2030; the rate-based benefit

estimate ranged from $14 billion to $34 billion.

142

Using the full range of benefits and costs reported in the 2015 RIA, assuming a 3% discount rate.

143

A list of quantified and unquantified benefits of the rule is provided in the 2015 RIA, pp. ES12 to ES-14, at

https://www.regulations.gov/document?D=EPA-HQ-OAR-2013-0602-37105.

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billion and costs of the proposed repeal in 2030 ranging from approximately $20 billion to $50

billion.144 The comparable figures for the rate-based scenario in 2030 were benefits ranging from

about $27 billion to $33 billion and costs ranging from approximately $19 billion to $56 billion.

EPA broke out the benefits and costs in several ways that resulted in qualitatively different

conclusions. Roughly two-thirds of the comparisons in the primary analysis showed net benefits

of the proposed repeal and roughly one-third of the comparisons in the primary analysis showed

net costs of the repeal. (See the next question for a more detailed discussion.)

Notably, these estimates do not reflect changes that have occurred in the power sector since 2015,

such as changes in expected electricity demand, expected growth in electricity generation by

renewable methods, retirement of older generating units, changes in the prices and availability of

different fuels, and state and federal regulations.145 Such changes may have implications for the

projected emissions baseline and therefore for the benefits and costs of the CPP. EPA committed

to updating the power sector modeling and publishing updated benefit and cost estimates based

on this analysis before it finalizes the proposed repeal.146

In the meantime, EPA also estimated the benefits and costs of the proposed repeal using the more

recent power sector projections in the Annual Energy Outlook (AEO), which is developed by the

U.S. Energy Information Administration. EPA observed that baseline CO2 emissions (i.e., CO2

emissions without the CPP) have been lower in each AEO projection released since EPA

conducted the 2015 CPP analysis. EPA used the AEO 2017 projections of CO2 emissions in

scenarios with and without the CPP to estimate the forgone reductions in CO2 emission and nonGHG emissions and the associated forgone benefits and avoided compliance costs. This analysis

suggested that using a more recent emissions baseline would result in lower estimates of the

emission reductions expected from the CPP, thereby lowering the estimated compliance costs and

benefits. EPA emphasized, however, that the estimates it developed using AEO 2017 are not

directly comparable to EPA’s 2015 estimates because the accounting treatments of demand-side

energy efficiency programs differs.

Q: How do the conclusions of EPA’s 2017 benefit-cost analysis compare to

those from the 2015 analysis?

A: EPA’s 2015 analysis of the CPP concluded that monetized benefits outweighed the monetized

costs (i.e., resulted in net benefits) under the illustrative scenarios considered. All of the benefitcost comparisons presented in the 2015 analysis showed positive net benefits on the order of

billions of dollars. EPA’s comparisons of the benefits and costs to repeal the CPP, however, offer

mixed results, with roughly two-thirds of the benefit-cost comparisons showing net benefits of the

proposed repeal and roughly one-third of the comparisons showing net costs of the repeal.147

144

These estimates are not a true range in part because they are based on different discount rates. These figures are the

lowest and highest monetized estimates presented in the primary benefit-cost comparison for each scenario in the year

2030. The estimates span two discount rates (3% and 7%) and varying levels of forgone health co-benefits. EPA also

presents estimates for the years 2020 and 2025.

145

U.S. Environmental Protection Agency, Regulatory Impact Analysis for Review of the Clean Power Plan: Proposal,

October 2017, at https://www.epa.gov/economic-and-cost-analysis-air-pollution-regulations/regulatory-impactanalysis-review-clean-power. See p. 17.

146

U.S. Environmental Protection Agency, Regulatory Impact Analysis for Review of the Clean Power Plan: Proposal,

October 2017, at https://www.epa.gov/economic-and-cost-analysis-air-pollution-regulations/regulatory-impactanalysis-review-clean-power. See p. 3.

147

Based on the comparisons in Tables 4-1 through 4-4 of the 2017 Regulatory Impact Analysis, which are based on

EPA’s 2015 power sector modeling. It does not include the observations that EPA presented about AEO 2017 because

(continued...)

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EPA compared the monetized benefits and costs of the proposed repeal using four different tallies

that showed qualitatively different conclusions. The only variable across the four tallies was the

level of forgone health co-benefits considered; the estimates of the avoided compliance costs,

forgone climate benefits, and forgone energy efficiency savings did not vary. The first tally

compared avoided compliance costs to the forgone domestic climate benefits and forgone energy

efficiency savings; it did not include any of the forgone health co-benefits. The second tally

compared avoided compliance costs to forgone domestic climate benefits, forgone energy

efficiency savings, and the forgone health co-benefits. The third and fourth tallies made the same

comparison as the second except they each applied a threshold to the forgone health co-benefits,

counting only the forgone health co-benefits that exceeded the defined threshold. Specifically,

EPA assumed in the third tally that forgone health co-benefits related to particulate matter

reductions fell to zero below the lowest measured level (LML) of each long-term particulate

matter mortality study; EPA therefore only counted the forgone health co-benefits exceeding the

LML. The threshold applied in the fourth tally assumed that health co-benefits related to

particulate matter reductions fell to zero below the fine particulate matter National Ambient Air

Quality Standard.

The first tally provided the most favorable benefit-cost comparison for the proposed repeal as

nearly all of the scenarios show the monetized benefits of the proposed repeal exceeding the

monetized costs of the repeal. The fourth tally also provided a generally favorable benefit-cost

comparison, with most of its scenarios showing net benefits of the repeal. The second and third

tallies showed the least favorable benefit-cost comparison for the proposed repeal, with nearly

half of the scenarios in each tally showing net costs of the proposed repeal.

Q: What accounts for the differences in EPA’s 2017 cost and benefit estimates

as compared to the 2015 RIA’s estimates?

A: EPA’s 2017 analysis presented some different conclusions about the benefits and costs of the

CPP relative to its 2015 analysis. One reason for the difference in qualitative conclusions is that

some of the benefit-cost comparisons in EPA’s 2017 analysis excluded portions of the estimated

health co-benefits. For example, one of the benefit-cost comparisons excluded the forgone health

co-benefits entirely to focus on the forgone benefits from the “targeted pollutant,” CO2. In two of

the other benefit-cost comparisons, EPA applied a threshold to the forgone health co-benefits,

counting only the forgone health co-benefits that exceeded a defined threshold for ambient

particulate matter concentration. That is, EPA assumed that health co-benefits would equal zero

for any particulate matter reductions beyond a threshold. The Agency established one threshold

on the “lowest measured level” of long-term particulate matter from two studies on mortality

related to particulate matter. EPA based the second threshold on the current federal air quality

standard for fine particulate matter.

In addition, EPA’s estimates of forgone climate benefits under the proposed repeal were lower

than the climate benefits it estimated in the 2015 CPP analysis due to changes it made to the

social cost of carbon (SCC). The SCC is an estimate of the monetary value of impacts from CO2

emission changes, including net changes in agricultural productivity and human health, property

damage from increased flood risk, and changes in energy system costs, such as reduced costs for

heating and increased costs for air conditioning. In 2015, EPA used estimates of the SCC148 to

(...continued)

they are not comparable to EPA’s estimates.

148

Estimates were developed by an interagency working group. See Interagency Working Group on Social Cost of

(continued...)

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estimate the global value of climate benefits expected from domestic CO2 reductions under the

CPP. The SCC estimates, however, have since been withdrawn by E.O. 13783.149 EPA therefore

developed new SCC values under E.O. 13783, which highlighted consideration of domestic

measures of the SCC as well as the OMB guidance on selection of discount rates. EPA’s new SCC

estimates are domestic measures of the social cost of carbon—i.e., estimates of the “direct

impacts of climate change that are anticipated to occur within U.S. borders”—and are discounted

at rates of 3% and 7%.150 The domestic perspective and use of a 7% rate in particular contributed

to lower estimates relative to the estimates used in 2015. EPA characterized the new SCC

estimates as “interim values ... for use in regulatory analyses until an improved estimate of the

impacts of climate change to the U.S. can be developed based on the best available science and

economics” but did not give a timeline for updates.151 EPA also presented sensitivity analyses

using global measures of the SCC and alternative discount rates but did not directly compare

those estimates to the avoided compliance costs of the proposed repeal.

Finally, EPA changed the accounting treatment of demand-side energy efficiency savings but this

did not alter the qualitative conclusions of the benefit-cost analysis. EPA’s 2015 analysis treated

savings from energy efficiency measures as a negative cost whereas the 2017 analysis treated the

energy efficiency savings as a positive benefit.152 That is, EPA broke out the energy efficiency

savings from the compliance cost tally presented in the 2015 analysis and moved energy

efficiency savings to the tally of forgone benefits in the 2017 analysis. This meant that the

avoided compliance cost tally increased by the same amount that the forgone benefits tally

increased and therefore there was no change in the comparison of benefits and costs.

Potential Impacts on the Electricity Sector

Q: How might the Clean Power Plan impact electricity prices and

electricity bills?

A: In the 2015 RIA, EPA estimated that the national average retail electricity price in the

contiguous United States would increase by less than 1% in both 2025 and 2030 compared to

EPA’s baseline scenario.153 However, EPA’s analysis indicated the electricity price changes would

(...continued)

Carbon, with participation by Council of Economic Advisers, Council on Environmental Quality, Department of

Agriculture, Department of Commerce, Department of Energy, Department of Transportation, Domestic Policy

Council, Environmental Protection Agency, National Economic Council, Office of Management and Budget, Office of

Science and Technology Policy, and Department of the Treasury, “Technical Support Document: Technical Update of

the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866,” May 2013 (revised July

2015), https://obamawhitehouse.archives.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.

149

For additional information on the SCC and issues following the withdrawal, see CRS In Focus IF10625, Social

Costs of Carbon/Greenhouse Gases: Issues for Congress, by (name redacted).

150

U.S. Environmental Protection Agency, Regulatory Impact Analysis for Review of the Clean Power Plan: Proposal,

October 2017, at https://www.epa.gov/economic-and-cost-analysis-air-pollution-regulations/regulatory-impactanalysis-review-clean-power. See p. 5.

151

U.S. Environmental Protection Agency, Regulatory Impact Analysis for Review of the Clean Power Plan: Proposal,

October 2017, at https://www.epa.gov/economic-and-cost-analysis-air-pollution-regulations/regulatory-impactanalysis-review-clean-power. See p. 42.

152

2015 RIA, p. ES-9.

153

2015 RIA, p. 3-35 and Tables 3-20 and 3-21.

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vary by region, ranging from a 5.9% increase (Wisconsin/Michigan region) to a 9% decrease

(Long Island region) in 2030 compared to the baseline scenario.154

By comparison, EPA estimated that the average monthly residential electricity bill would decline

by 7.0%-7.7% in 2030 (compared to a baseline scenario) as consumption of electricity declines

due to efficiency measures.155 (EPA’s analysis did not provide a regional breakout for electricity

bill impacts.) Although the final rule did not include energy efficiency activities in the state target

calculations,156 energy efficiency plays a substantial role in EPA’s 2015 RIA.

Q: How did the Clean Power Plan address electricity reliability?

A: EPA’s proposed CPP rule generated substantial interest in the potential effects of the rule on

the reliability of electric power supply. EPA asserted that it did not want compliance with the final

rule to interfere with industry’s ability to maintain the reliability of the nation’s electricity supply.

EPA’s final CPP rule addressed electric system reliability in several ways.

In particular, the final rule contained a provision for a reliability “safety valve” for individual

power plants. EPA stated that there may be a need for an EGU to continue to operate and release

“excess emissions” if an emergency situation arises that could compromise electric system

reliability. The reliability safety valve would allow for a 90-day reprieve from CO2 emissions

limits. EPA stated that the safety valve could be triggered only in an emergency situation. For

example, extreme weather events are “of short duration and would not require major—if any—

adjustments to emission standards for affected EGUs or to state plans.”157

EPA also implemented a formal memorandum of joint understanding on maintaining electric

system reliability with the Department of Energy and the Federal Energy Regulatory Commission

so as to coordinate efforts while the state compliance plans are developed and implemented. The

memorandum expresses the joint understanding of how the agencies will cooperate, share

information, monitor states’ progress and implementation of the rule, and resolve difficulties that

may be encountered.158

Q: What types of electricity sector infrastructure changes might result from

the Clean Power Plan?

A: Although the CPP would not directly require infrastructure changes in the electricity sector,

states might need to modify or expand existing infrastructure to meet their emission or emission

rate targets. For example, increased use of existing NGCC capacity might require upgraded

transmission facilities and potentially new natural gas infrastructure to provide fuel. Projected

increases in renewable generation would likely require new transmission lines: it can take

anywhere from 3 to 10 years to get the federal, state, and local permits in place to build a major

electric transmission line.159 If additional transmission capacity is required, planning would likely

need to begin soon to get new lines in place for when they would be needed in the early 2020s.

154

2015 RIA, Table 3-21.

2015 RIA, p. 3-40.

156

See above, “Q: What role does energy efficiency play in EPA’s final rule?”

157

EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,”

Final Rule, 80 Federal Register 64878, October 23, 2015.

158

EPA-DOE-FERC Coordination on Implementation of the Clean Power Plan, August 2015, http://www.ferc.gov/

media/headlines/2015/CPP-EPA-DOE-FERC.pdf.

159

For further discussion, see CRS Report R44265, EPA's Clean Power Plan: Implications for the Electric Power

(continued...)

155

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Reconsidering the Rule

Q. What was required by President Trump’s Executive Order 13783?

A. E.O. 13783, which was signed by President Trump on March 28, 2017, required reviews of all

agency actions “that potentially burden the development of domestically produced energy

resources, with particular attention to oil, natural gas, coal, and nuclear energy resources.”160 The

order addresses specific CAA regulations, including the CPP for existing fossil-fueled electric

generating units (EGUs) and two proposed rules related to it, the New Source Performance

Standards (NSPSs) for new and modified EGUs, and the NSPSs for the Oil and Natural Gas

Sector. Each of these rules would control GHG emissions from an energy-producing sector. The

E.O. directed EPA to review these rules “for consistency with the policy set forth in section 1 of

this order,” and, if appropriate, to “suspend, revise, or rescind” them.

Section 1 lists many goals, including to



“promote clean and safe development of our nation’s vast energy resources,”

“ensure that the Nation’s electricity is affordable, reliable, safe, secure, and

clean,”

“take appropriate actions to promote clean air and clean water,” and

ensure that “necessary and appropriate environmental regulations comply with

the law, are of greater benefit than cost, when permissible, achieve environmental

improvements for the American people, and … employ the best-available peerreviewed science and economics.”

EPA has initiated its review of the CPP and the NSPSs for new and modified EGUs;161 on

October 10, 2017, it proposed to repeal the CPP. The proposed repeal is subject to public

comment until January 16, 2018. Two days of public hearings on the proposal were held on

November 28 and 29, 2017, in Charleston, WV.

Q. What is the process for suspending, revising, or repealing the Clean Power

Plan?

A. As the result of a stay issued by the Supreme Court in February 2016, implementation of the

CPP is already suspended pending the resolution of judicial challenges. As discussed in the

“Judicial Review” section of this report, the U.S. Court of Appeals for the District of Columbia

(D.C. Circuit) heard oral argument in a case challenging the rule, State of West Virginia v. EPA,162

in September 2016, but has yet to issue an opinion. In April 2017, EPA requested that the D.C.

Circuit put the legal challenge to the rule in abeyance for 60 days while the agency considers the

(...continued)

Sector, by (name redacted)

160

Executive Order 13783, “Promoting Energy Independence and Economic Growth,” March 28, 2017, Section 2. For

further discussion, see CRS Legal Sidebar WSLG1789, New Executive Order Directs Agencies to Revise or Rescind

Climate Change Rules and Policies, by (name redacted)

161

EPA, “Review of the Clean Power Plan,” 82 Federal Register 16329, April 4, 2017; EPA, “Review of the Standards

of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric

Generating Units,” 82 Federal Register 16330, April 4, 2017.

162

West Virginia v. EPA, No. 15-1363 (D.C. Cir. docketed October 23, 2015).

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next steps in the review of the rule mandated by E.O. 13783. The court further extended the

abeyance of the litigation after EPA issued its proposal to repeal the CPP.163

Repealing the CPP, as proposed by EPA on October 10, is more complicated than suspending it.

Repealing a promulgated rule requires the promulgating agency to go through the same steps as

the original rulemaking, a process governed in this case by Section 307(d) of the Clean Air Act.164

Under Section 307(d), repeal must first be proposed in the Federal Register, along with “a

statement of its basis and purpose” and shall specify a period available for public comment. The

statement of basis and purpose must include a summary of the factual data on which the proposal

is based; the methodology used in obtaining the data and in analyzing the data; and the major

legal interpretations and policy considerations underlying the proposal. (For a discussion of EPA’s

basis and purpose for repeal of the CPP, see above, “Q: What is the basis of EPA’s proposed CPP

repeal?”)

The statement must also set forth or summarize any pertinent findings, recommendations, and

comments by the Clean Air Scientific Advisory Committee and the National Academy of

Sciences, and, if the proposal differs in any important respect from any of these

recommendations, an explanation of the reasons for such differences.

Following proposal and public comment, a repeal of the rule may be promulgated. The

promulgated repeal must also be accompanied by a statement of basis and purpose, and an

explanation of the reasons for any major changes from the proposal. The promulgated repeal must

also be accompanied by a response to each of the significant comments, criticisms, and new data

submitted in written or oral presentations during the comment period. The promulgated repeal

may not be based (in part or whole) on any information or data which has not been placed in the

docket as of the date of promulgation.

In the case of review of any action of the Administrator to which subsection 307(d) applies, the

D.C. Circuit may reverse any such action found to be arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law, or without observance of the procedures required by law,

if the failure to observe such procedure is arbitrary or capricious.165

The CPP and the International Paris Agreement

Q: What would the CPP contribute to meeting the U.S. GHG mitigation pledge

under the international Paris Agreement (PA)?

The CPP was one major element of President Obama’s Climate Action Plan (CAP), a broad

federal strategy announced in June 2013 to address human-induced climate change. The CAP, in

turn, was part of the U.S. contribution to a global effort, embodied in the Paris Agreement (PA) to

halt the increase of GHG concentrations in the atmosphere in order to hold the GHG-induced

increase of global temperature below 2oCelsius or less.

There is broad agreement that effectively halting the rise in GHG concentrations would require

GHG emissions mitigation by all major emitting countries. The United States historically was the

leading GHG emitter until around 2007, when China surpassed it. In 2013, the United States

163

Order, West Virginia v. EPA, No. 15-1363 (D.C. Cir. November 9, 2017).

42 U.S.C. §7607.

165

42 U.S.C. §7607(b), (d)(9).

164

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emitted approximately 13% of net human-related GHG emissions, second to China, at

approximately 24%.

President Obama pledged in 2015 that the United States would reduce its GHG emissions to 2628% below 2005 levels by 2025.166 The status of that U.S. pledge is now in flux. On June 1, 2017,

President Trump announced that the United States would withdraw from the Paris Agreement.

The timing, method, and specifics of this action are unclear. A White House official reportedly

stated that the United States will follow the four-year legal procedure for withdrawal outlined in

Article 28 of the PA: The United States may submit its written intent to withdraw three years after

the treaty entered into force for the United States, on November 4, 2016. Withdrawal may take

effect one year later—on or after November 4, 2020. In the meantime, the United States remains a

Party to the PA (unless, following customary international law, the other Parties agree to allow an

earlier exit). The Administration did not indicate whether and how the United States may

participate in PA procedures until withdrawal is complete; one question is whether the United

States will formally withdraw its NDC prior to withdrawal from the PA.

At least 165 GHG pledges have been submitted, covering almost 190 countries, including all

major emitters. The PA has 148 Parties—governments that have legally ratified or accepted the

agreement—out of 195 Signatories. Of the top 20 emitting nations, only Iran and Russia are not

Parties.

Though submitting a pledge is mandatory for all countries that are party to the international Paris

Agreement (PA),167 including the United States, the quantitative GHG target is not legally

binding. The U.S. submission is now recorded in the PA’s registry as the U.S. Nationally

Determined Contribution (NDC). President Obama’s CAP, along with projected economic and

technological developments, was expected to achieve most of the GHG reductions necessary to

meet the U.S. NDC target, but further policy actions would likely have been required.

EPA estimated that the electricity sector’s CO2 emissions would decrease by 28% from 2005 to

2025 (the target year for the U.S. NDC) under the CPP and certain assumptions; this would be

approximately 11-12% below EPA’s baseline projection for affected EGUs (i.e., without the

CPP). The 680-709 million metric tons (Mt)168,169 of CO2 reductions projected from the electricity

sector under a scenario that includes the CPP were estimated to constitute 36-37% of the 1901 Mt

net reduction that would achieve a 26% reduction below the 2005 level—the minimum U.S.

target.170

Other organizations used models to compare baseline scenarios with various CPP scenarios.

Table 5 lists the CO2 emission projections from these groups with EPA’s 2015 RIA estimate.

Some of these groups produced multiple projections, employing different assumptions of future

166

This is not the first U.S. quantitative GHG emission reduction pledge. President George W. Bush made the first

commitment to a GHG target, on February 4, 2002, to reduce U.S. GHG emissions per unit of Gross Domestic Product

by 18 by 2012. President Obama pledged in 2009 to reduce emissions “in the range of 17%” by 2012.

167

For more information on the UNFCCC, the Kyoto Protocol, and the Paris Agreement, see CRS Report R44609,

Climate Change: Frequently Asked Questions About the 2015 Paris Agreement, by (name redacted) and (name redac

ted)

168

U.S. Environmental Protection Agency, Regulatory Impact Analysis for the Clean Power Plan Final Rule, October

23, 2015, at https://www.regulations.gov/document?D=EPA-HQ-OAR-2013-0602-37105. p. 3-19.

169

CRS converted the 750-782 million short tons of reduction below the projected baseline in 2025, as cited in the

2015 RIA, to million metric tons, to be consistent with the pledge for the Paris Agreement.

170

The electricity sector would contribute additional GHG reductions beyond the CPP due to other factors, including

the switch from coal to natural gas and renewable energy for economic reasons, and ongoing efficiency improvements

included in the baseline projection for the 2015 RIA.

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EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions

activities: CPP implementation options (e.g., whether states engaged in emissions trading) and

levels of energy efficiency improvements, among others.

In general, the modeling results in Table 5 indicate that the CPP would have a substantial impact

on future CO2 emission levels from electricity generation compared to scenarios that do not

include the CPP. All of the modeling scenarios below (except for EPA) included the December

2015 renewable energy tax extensions. On December 18, 2015, President Obama signed into law

the Consolidated Appropriations Act, 2016 (P.L. 114-113). The act, among other provisions,

extended and modified the production tax credit (PTC) and the investment tax credit (ITC) for

specific renewable energy technologies.171 Prior to the December 2015 development, the PTC had

expired and the ITC was scheduled to expire at the end of 2016. The PTC will not be available to

projects starting construction after December 31, 2019. However, PTC tax expenditures will

continue after that date, because the PTC is available for the first 10 years of renewable electricity

production. The ITC for solar is scheduled to decline from 30% to 26% in 2020, and 22% in

2021, before returning to the permanent rate of 10% after 2021.172

Table 5. Comparison of Selected Modeling Projections: CPP and Non-CPP Scenarios

Million Metric Tons of CO2 Emissions

Non-CPP Scenario:

2030 CO2 Emissions

% Below 2005

Levels

CPP Scenario(s):

2030 CO2 Emissions

% Below 2005

Levels

EPA (2015)

2,021

16%

1,644

32%

Energy Information

Administration (2017)

1,886

22%

1,537

36%

Rhodium Group (2017)

1,774

26%

1,524

37%

M. J. Bradley and

Associates (2016)

1,780-1,876

22%-26%

1,577-1,729

28%-34%

National Renewable

Energy Laboratory (2016)

Not included

1,448–1,556

32%-36%

Modeling Group

Source: EPA data from the agency’s Power Sector Modeling, 2015, http://www.epa.gov/airmarkets/programs/

ipm/cleanpowerplan.html; Energy Information Administration data from Annual Energy Outlook 2017, 2017,

https://www.eia.gov/outlooks/aeo/. Rhodium Group data from “Taking Stock 2017: Adjusting Expectations for US

GHG Emissions,” 2017, http://rhg.com/reports/taking-stock-2017-adjusting-expectations-for-us-ghg-emissions;

and personal correspondence with authors to provide 2030 estimate for CCP scenari

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