# EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3AR44341 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** December 19, 2017 - **Citation:** R44341 ## Text EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions (name redacted) Specialist in Environmental Policy (name redacted) Specialist in Environmental Policy (name redacted) Specialist in Energy and Environmental Policy (name redacted) Legislative Attorney (name redacted) Analyst in Environmental Policy December 19, 2017 Congressional Research Service 7-.... www.crs.gov 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 Congressional Research Service 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 Congressional Research Service 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 O 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. 1 Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 82 Federal Register 48,035 (October 16, 2017). 2 U.S. EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64661, October 23, 2015. 3 42 U.S.C. §7411(d). 4 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. 5 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 1 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 6 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) . 7 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). 8 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. 9 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?” 10 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. 11 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) . 12 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). 13 See CRS In Focus IF10239, President Obama Pledges Greenhouse Gas Reduction Targets as Contribution to 2015 (continued...) Congressional Research Service 2 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) . 14 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. 15 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. 16 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. Congressional Research Service 3 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%. Congressional Research Service 4 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 17 Other sectors include transportation, industrial, commercial, and residential. EPA, Inventory of Greenhouse Gas Emissions and Sinks: 1990-2015, April 2017. 19 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) . 18 Congressional Research Service 5 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 20 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) . 21 EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2015, April 2017, pp. 3-24 and ES-7. 22 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. 23 On October 27, 2017, the D.C. Circuit Court of Appeals granted the Truck Trailer Manufacturers Association’s (continued...) Congressional Research Service 6 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). 24 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. 25 EPA, “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources; Final Rule,” 81 Federal Register 35824, June 3, 2016. 26 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. 27 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). 28 Exec. Order No. 13783, 82 Federal Register 16093 §7 (March 31, 2017) (signed on March 28, 2017). 29 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). 30 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 7 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. 31 42 U.S.C. §7411(d). 32 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. 33 42 U.S.C. §7411(d)(i). 34 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.” 35 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. 36 See, for example, ibid. (passim); 40 C.F.R. subparts C, Cc, Cd, Ce, UUUU. 37 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. 38 See below, “Q: What legal arguments are being made for and against the final Clean Power Plan rule?” in the (continued...) Congressional Research Service 8 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. 39 P.L. 101-549, §108(g), 104 Stat. 2399, 2467 (1990), codified at 42 U.S.C. §7411(d)(1)(A)(i). 40 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). 41 See below, “Q: What legal arguments are being made for and against the final Clean Power Plan rule?” 42 EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64711, October 23, 2015. 43 Ibid., 64712-64714. 44 Ibid., 64714; see also below, “Q: What legal arguments are being made for and against the final Clean Power Plan rule?” 45 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). 46 P.L. 101-549, §302(a), 104 Stat. 2399, 2574 (1990). 47 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 9 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 48 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. 50 New Jersey vs. EPA, 517 F.3d at 581-584. 51 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. 52 Ibid. 53 EPA, “Emission Guidelines and Compliance Times for Municipal Solid Waste Landfills,” 81 Federal Register 59276, August 29, 2016. 54 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). 55 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. 56 60 Federal Register 65387, February 19, 1995 (establishing Subpart Cb under CAA Section 129). 57 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). 58 EPA, “Phosphate Fertilizer Plants, Final Guideline Document Availability,” 42 Federal Register 12022, March 1, 1977. 59 EPA, “Kraft Pulp Mills; Final Guideline Document; Availability,” 44 Federal Register 29828, May 22, 1979. 60 EPA, “Primary Aluminum Plants; Availability of Final Guideline Document,” 45 Federal Register 26294, April 17, 1980. 61 See footnote 47, 5-8 (citing 40 C.F.R. Parts Cb, Ce, BBBB, DDDD, FFFF, and MMMM). 49 Congressional Research Service 10 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.” 62 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. 63 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?” 64 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?” 65 Executive Order 13783, § 4(b)(ii), 82 Federal Register 16093 (March 31, 2017) (signed on March 28, 2017). 66 CAA §111(a)(1), 42 U.S.C. §7411(a)(1). Congressional Research Service 11 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 67 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. 69 See ibid., parts VI-VII, 80 Federal Register at 64811-64826. 70 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”). 71 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). 72 See “Q: What legal arguments are being made for and against the final Clean Power Plan rule?” 73 467 U.S. at 842-43. 74 See “Q: What legal arguments are being made for and against the final Clean Power Plan rule?” 75 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. 68 Congressional Research Service 12 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. 76 EIA, Annual Energy Outlook 2017, January 2017, https://www.eia.gov/outlooks/aeo/. Congressional Research Service 13 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, 77 CRS Report R41836, The Regional Greenhouse Gas Initiative: Lessons Learned and Issues for Congress, by (name redacted) . 78 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. Congressional Research Service 14 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) 79 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. 80 See EPA, “Data File: Goal Computation Appendix 1-5,” http://www2.epa.gov/cleanpowerplan/clean-power-planfinal-rule-technical-documents. 81 EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64743, October 23, 2015. Congressional Research Service 15 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 16 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). Congressional Research Service 17 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 Not established NA 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 7% Delaware 1,209 916 24% Florida 1,221 919 25% Congressional Research Service 18 EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions Georgia 1,597 1,049 34% Hawaii Not established Not established NA Idaho 834 771 8% 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 19 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. 82 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. 83 EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64822, October 23, 2015. Congressional Research Service 20 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 Not established 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 4% 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 Not established Not established Idaho 1,438,919 1,492,856 4% 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 21 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 22 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 1% 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. 84 EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64664, October 23, 2015. 85 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. 86 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. 87 EPA, “Withdrawal of Proposed Rules,” 82 Federal Register 16144, April 3, 2017. Congressional Research Service 23 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 88 EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” Final Rule, 80 Federal Register 64897, October 23, 2015. 89 See CRS Report R41836, The Regional Greenhouse Gas Initiative: Lessons Learned and Issues for Congress, by (name redacted) . See also http://www.rggi.org/. 90 See http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm. 91 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. 92 More details are available at http://www.climatechange.ca.gov/. 93 For more details, see this Press Release, https://www.gov.ca.gov/news.php?id=19891. 94 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 24 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 95 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. 97 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. 98 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. 99 For a discussion of this issue, see EPA, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: (continued...) 96 Congressional Research Service 25 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...) Congressional Research Service 26 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. Congressional Research Service 27 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. Congressional Research Service 28 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. Congressional Research Service 29 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 Congressional Research Service 30 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 Congressional Research Service 31 EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions 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) . Congressional Research Service 32 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 impac [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR44341. Public record. Not legal advice.