EPA’s Affordable Clean Energy Rule and Related Issues: Frequently Asked Questions
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EPA’s Affordable Clean Energy Rule and
Related Issues: Frequently Asked Questions
August 13, 2020
Congressional Research Service
https://crsreports.congress.gov
R46482
SUMMARY
EPA’s Affordable Clean Energy Rule and
Related Issues: Frequently Asked Questions
In 2019, the U.S. Environmental Protection Agency (EPA) completed its reconsideration of a
Clean Air Act (CAA) rulemaking for greenhouse gas (GHG) emissions from existing fossil-fuelfired power plants. Specifically, the agency repealed the Clean Power Plan (CPP) and
promulgated new guidelines for coal-fired power plants in the Affordable Clean Energy (ACE)
rule. EPA based these actions on its conclusion that the CPP exceeded CAA authority by using
measures that applied to the power sector as a whole rather than measures implemented at an
individual facility. EPA also promulgated new general regulations to implement the ACE rule
and any future emission guidelines issued under CAA Section 111(d).
EPA promulgated the CPP in 2015 to limit GHG emissions—specifically, carbon dioxide
(CO2)—from existing fossil-fuel-fired power plants. The CPP was the subject of ongoing
litigation and never went into effect. In 2017, EPA reviewed the CPP in response to Executive
Order (E.O.) 13783, which directed federal agencies to “review existing regulations and policies
that potentially burden the development or use of domestically produced energy resources.”
EPA’s review concluded that the CPP exceeded EPA’s statutory authority. The agency therefore
proposed repeal of the CPP in 2017 and a rule to replace it in 2018.
R46482
August 13, 2020
Kate C. Shouse,
Coordinator
Analyst in Environmental
Policy
Jonathan L. Ramseur
Specialist in Environmental
Policy
Linda Tsang
Legislative Attorney
The structure and major provisions of the final ACE rule largely resemble those EPA proposed in August 2018. For example,
the ACE rule defines the best system of emission reduction (BSER) for existing, coal-fired power plant CO2 emissions as
“heat rate improvement” measures, also known as efficiency improvements. EPA stated that it lacked adequate information
to establish a BSER for other types of existing fossil-fuel-fired units, particularly natural-gas-fired units. Similar to the
proposal, the ACE rule does not establish a binding, numeric performance standard for CO 2 emissions from existing coalfired units. Rather, EPA identified six candidate technologies, which it characterized as the “most impactful” in the 2018
proposal, along with operating and maintenance practices that states must evaluate in establishing a standard of performance
for each source in their state plans under CAA Section 111(d). Noting that many state and industry commenters requested a
presumptive standard or additional clarity, EPA specified the level of emissions reductions achievable using the candidate
technologies. States, however, must ultimately establish a rate-based standard and have the option to establish performance
standards reflecting a heat rate improvement that falls outside of these ranges.
EPA analyzed the ACE rule and the CPP repeal impacts separately, projecting emission changes under each rule in 2025,
2030, and 2035. The agency projected “modest” CO2 reductions (less than 1%) under the final ACE rule compared to a
baseline, which excludes the CPP. In its separate CPP repeal analysis, EPA projected CO2 reductions ranging from zero to
3.5% under several CPP implementation scenarios compared to a baseline without the CPP. EPA considered these
projections as well as power sector trends and concluded that “the most likely result” of implementing the CPP would be “no
change in emissions.” Others have modeled different assumptions than EPA to assess the CPP repeal and reached different
conclusions about projected emission changes.
EPA also finalized revisions to the general implementing regulations under CAA Section 111. The revisions codify EPA’s
current interpretation that states have “broad discretion” to establish and apply emission standards consistent with the BSER.
Among other things, EPA lengthened the timeline specified in federal regulations for development and review of state plans.
EPA did not finalize the proposed revision to the applicability test for certain power plants under New Source Review (NSR).
The NSR program generally requires emission limits based on the best available control technology when new facilities are
built or when an existing facility makes a change that increases emissions above specified thresholds. Historically, NSR
applicability determinations have been contentious and extensively litigated. According to EPA, the NSR changes that were
included in the ACE proposal would prevent NSR from discouraging the installation of energy-efficiency measures. EPA
stated that it intends to take final action on the proposed NSR changes at a later date.
Twenty-three states, the District of Columbia, and seven municipalities are challenging the CPP repeal and ACE rule in the
U.S. Court of Appeals for the D.C. Circuit. A coalition of 21 states has intervened in the litigation in support of EPA. Various
other public interest organizations, industry groups, and Members of Congress are also participating in the litigation.
Congressional Research Service
Contents
Introduction ..................................................................................................................................... 1
Background ..................................................................................................................................... 2
Q: How much does the generation of electricity contribute to total U.S. GHG
emissions? ........................................................................................................................ 2
Q: How much progress has the United States made in reducing GHG emissions
and meeting emission targets? ......................................................................................... 5
Q: What are the Clean Air Act (CAA) Section 111 requirements? ..................................... 6
Q: How does the CAA Section 111 define standards of performance and best
system of emission reduction? .......................................................................................... 7
Q: What is a “state plan”? ................................................................................................... 7
Q: What is the difference between a “state plan” and a “state implementation
plan”? ............................................................................................................................... 8
Q: What was the Clean Power Plan (CPP)? ........................................................................ 9
Q: Did the CPP ever take effect? ........................................................................................ 9
Q: Did EPA promulgate GHG performance standards for new and modified
power plants under the CAA? .......................................................................................... 9
Q: What is the status of GHG performance standards for new and modified power
plants? ............................................................................................................................ 10
Q: Do the CPP repeal and ACE rules have implications for EPA’s other GHG
rulemakings or the endangerment finding?..................................................................... 11
Repeal of the Clean Power Plan ..................................................................................................... 11
Q: Why did EPA repeal the CPP? ...................................................................................... 11
Q: How has EPA’s interpretation of Section 111 authority changed from its
interpretation in the CPP? .............................................................................................. 12
Q: Has anyone challenged the CPP repeal in court? ......................................................... 13
Affordable Clean Energy (ACE) Final Rule ................................................................................. 13
Q: What is the ACE rule?.................................................................................................. 13
Q: Why did EPA promulgate the ACE rule? ..................................................................... 14
Q: To whom does the ACE rule directly apply? ............................................................... 14
Q: What types of facilities are affected by the final rule? ................................................. 14
Q: What is the BSER under the ACE rule? ....................................................................... 15
Q: What are the ACE rule’s performance standards for CO2 emissions? ......................... 15
Q: Why did EPA not establish a numeric or presumptively approvable CO2
performance standard in the ACE rule? ......................................................................... 16
Q: What are the candidate technologies under the ACE rule? .......................................... 17
Q: How will states establish CO2 emission performance standards? ................................ 19
Q: Can states establish CAA Section 111(d) performance standards less stringent
than otherwise expected from implementing the BSER? .............................................. 19
Q: What are the next steps to implement the ACE rule and what is the timeline?............ 21
Q: When do existing coal-fired EGUs have to comply with performance
standards established by states under the ACE rule? ..................................................... 22
Q: What information must a state include in the state plan submission for existing
coal-fired units? ............................................................................................................. 22
Q: How does the ACE rule interact with existing GHG emission reduction
programs in the states, such as the Regional Greenhouse Gas Initiative and
California’s climate policies? ........................................................................................ 23
Congressional Research Service
Q: Can states use emission reduction measures outside the “candidate
technologies” list to establish the ACE rule’s performance standards? ......................... 24
Q. Why did EPA exclude natural gas co-firing from the BSER? ...................................... 25
Q: Why didn’t EPA establish a BSER for other fossil-fuel-fired units? ........................... 26
Litigation Challenging the CPP Repeal and the ACE Rule ........................................................... 28
Q: Who is challenging the CPP Repeal, the ACE rule, and the revised
implementing regulations? ............................................................................................. 28
Q: Who are the respondents and intervenors in support of the rules?............................... 30
Q: What are the main legal issues in the litigation? .......................................................... 30
Q: What is the status of the litigation? .............................................................................. 35
EPA’s Updated Analysis of the CPP Repeal and the ACE Rule: Emission Impacts,
Benefits, and Costs ..................................................................................................................... 35
Q: How did EPA estimate the emission impacts of the final rules repealing the
CPP and promulgating the ACE rule?............................................................................ 35
Q: What CO2 emission effects did EPA estimate from the CPP repeal and from
the ACE rulemakings? ................................................................................................... 37
Q: How do the CO2 emission projections in the final ACE rule compare with
prior EPA CO2 emission projections? ............................................................................ 40
Q: What non-CO2 emission effects did EPA estimate from the CPP repeal and
ACE rulemakings? ......................................................................................................... 42
Q: Would the ACE rule’s HRI lead to potential “rebound effects”? ................................. 44
Q: What are EPA’s estimated costs and benefits of the proposed repeal of the
CPP? .............................................................................................................................. 47
Q: What are EPA’s estimated costs and benefits of the final ACE rule? .......................... 47
Q: How did EPA estimate the climate benefits? ............................................................... 48
Q: What are the implications of using the “interim SC-CO2” estimates to estimate
climate benefits? ............................................................................................................ 49
Q: How did EPA estimate the human health co-benefits? ................................................ 50
Q: What are the implications of EPA’s approach to co-benefits in the ACE
analysis?......................................................................................................................... 52
General Implementing Regulations for Section 111(d) ................................................................ 54
Q: What are the general implementing regulations for Section 111(d)? ........................... 54
Q: What changes did EPA make to the schedules for submission and review of
state plans and federal plans?......................................................................................... 55
Q: Why did EPA establish new schedules for submission and review of state plans
and federal plans? .......................................................................................................... 55
EPA Postpones Decision Regarding New Source Review (NSR) Changes .................................. 56
Q: What changes to New Source Review applicability did EPA propose in August
2018?.............................................................................................................................. 56
Q: Why did EPA propose changes to NSR applicability in the ACE proposal? ............... 57
Q: What is the status of the changes EPA proposed for NSR in the ACE proposal? ........ 57
Issues for Congressional Consideration ........................................................................................ 57
CAA Regulation of GHG Emissions ....................................................................................... 58
Federal and State Roles to Implement the ACE Rule ............................................................. 59
Role of Benefit-Cost Analysis in CAA Rulemakings ............................................................. 60
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Figures
Figure 1. GHG Emissions by Economic Sector .............................................................................. 3
Figure 2. Percentage of Total Electricity Generation by Energy Source ......................................... 4
Figure 3. U.S. GHG Emissions (Net) .............................................................................................. 6
Figure 4. States and Municipalities Participating in the ACE Rule and CPP Repeal
Litigation .................................................................................................................................... 29
Figure 5. EPA Projections of CO2 Emissions in the Electric Power Sector .................................. 39
Figure 6. Comparison of EPA Reference Case Scenarios ............................................................. 41
Figure 7. EPA Estimates of CO2 Emissions Changes Under ACE Rule Policy Scenario
Compared to the Reference Case (2030) .................................................................................... 45
Figure 8. EPA Estimates of SO2 Emissions Changes Under ACE Rule Policy Scenario
Compared to the Reference Case (2030) .................................................................................... 46
Figure 9. EPA Estimates of NOx Emissions Changes Under ACE Rule Policy Scenario
Compared to the Reference Case (2030) .................................................................................... 47
Tables
Table 1. EPA Projections of CO2 Emissions in the Electric Power Sector .................................... 38
Table 2. EPA Projected Non-CO2 Emissions in the Electric Power Sector ................................... 42
Table 3. EPA Projected Changes in Non-CO2 Emissions in the Electric Power Sector ................ 43
Table 4. Timing Requirements ...................................................................................................... 55
Contacts
Author Information........................................................................................................................ 62
Congressional Research Service
Introduction
In 2019, the U.S. Environmental Protection Agency (EPA) finalized its repeal of the Clean Power
Plan (CPP) rulemaking and promulgated new emissions guidelines for existing coal-fired electric
utility generating units (EGUs), more commonly referred to as power plants,1 in the Affordable
Clean Energy (ACE) rule.2 These actions stem from a legal interpretation of Section 111 of the
Clean Air Act (CAA). EPA also finalized new general regulations to implement the ACE rule and
any future emission guidelines issued under CAA Section 111(d).
EPA promulgated the CPP in 2015 to limit greenhouse gas (GHG) emissions—specifically,
carbon dioxide (CO2)3—resulting from the combustion of fossil fuels at existing fossil-fuel-fired
EGUs. CO2 emissions account for about 82% of U.S. GHG emissions and over 98% of the GHG
emissions in the electric power sector.4 The CPP was litigated and never went into effect due to a
stay issued by the Supreme Court in February 2016. Challenges to the CPP centered on the rule’s
legal justification and EPA’s methodology to establish national CO2 emission performance rates.
In 2017, EPA reviewed the CPP under Executive Order (E.O.) 13783, which directed federal
agencies to “review existing regulations and policies that potentially burden the development or
use of domestically produced energy resources.”5 EPA’s review concluded that the CPP exceeded
EPA’s statutory authority by using measures that applied to the power sector as a whole rather
than measures carried out within an individual facility. The agency therefore proposed repeal of
the CPP in 2017.
In 2018, the EPA proposed three actions in the ACE rule.6 First, EPA proposed to replace the CPP
with new emission guidelines for existing coal-fired EGUs. Second, EPA proposed revised
regulations to implement emission guidelines under CAA Section 111(d). Third, EPA proposed to
modify an applicability determination for New Source Review (NSR), a CAA preconstruction
permitting program for new and modified stationary sources.7
Debate surrounding CO2 performance standards and EPA’s interpretation of its CAA authority
continues with the repeal of the CPP and issuance of the ACE rule. Stakeholders have expressed
divergent views regarding EPA’s interpretation of its CAA authority and its best system of
emission reduction (BSER) determination under Section 111(d). Twenty-three states, the District
of Columbia, seven municipalities, and various stakeholders are challenging the CPP repeal and
1 The term power plant is a general term referring to a facility that has at least one electric utility generating unit to
generate electricity. This report uses the terms power plant and electric utility generating unit (EGU) interchangeably.
2 EPA, “Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas Emissions from Existing Electric
Utility Generating Units; Revisions to Emission Guidelines Implementing Regulations,” 84 Federal Register 32534,
July 8, 2019 (hereinafter “ACE Final Rule”).
3 Under the CAA, the pollutants regulated in the CPP and the ACE rule are GHGs with standards expressed in the form
of CO2 limits. See 40 C.F.R. §60.5705a (for the ACE rule); 40 C.F.R. §60.5705(a) (for the repealed CPP).
4 EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2017, April 2019.
5 Executive Order 13783, 82 Federal Register 16093 §7 (March 31, 2017). For more information on this executive
order, see CRS Legal Sidebar WSLG1789, New Executive Order Directs Agencies to Revise or Rescind Climate
Change Rules and Policies, by Linda Tsang.
6 EPA, “Emission Guidelines for Greenhouse Gas Emissions from Existing Electric Utility Generating Units; Revisions
to Emission Guideline Implementing Regulations; Revisions to New Source Review Program,” 83 Federal Register
44761, August 31, 2018 (hereinafter “ACE Proposal”).
7 For more information see CRS Report R45393, EPA’s Affordable Clean Energy Proposal, by Kate C. Shouse,
Jonathan L. Ramseur, and Linda Tsang.
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ACE rule.8 Twenty-one states and other stakeholders have intervened in the litigation in support
of the CPP repeal and ACE rule.9
In order to provide information about the repeal of the CPP, promulgation of the ACE rule and
related actions, and litigation, this report presents a series of questions and responses and
concludes with a discussion of issues for congressional consideration.
For a detailed discussion of EPA’s 2018 ACE proposal, see CRS Report R45393, EPA’s
Affordable Clean Energy Proposal, by Kate C. Shouse, Jonathan L. Ramseur, and Linda Tsang.
For a detailed discussion of the legal issues, see CRS Legal Sidebar LSB10325, EPA Replaces the
Clean Power Plan with the Affordable Clean Energy Rule, by Linda Tsang; and CRS Legal
Sidebar LSB10199, EPA Proposes New Permitting Test for Power Plant Modifications, by Linda
Tsang.
Background
Q: How much does the generation of electricity contribute to total U.S. GHG
emissions?
A: Anthropogenic (i.e., man-made) GHG emissions are generated throughout the United States
from millions of discrete sources: vehicles, power plants, industrial facilities, households,
commercial buildings, and agricultural activities (e.g., soils and livestock).10 According to EPA,
since 1990, GHG emissions from fossil fuel combustion—coal, natural gas, and petroleum—have
accounted for 74%-78% of total U.S. GHG emissions.11 As illustrated by Figure 1, the electricity
sector historically accounted for the largest percentage of U.S. GHG emissions from fossil fuel
combustion. However, due to declines in the electricity sector emissions over the past decade, the
transportation sector surpassed electricity in 2016. In 2018, the transportation sector accounted
for 28% and the electricity sector accounted for 27% of total U.S. GHG emissions.
8 See Docket, Am. Lung Assoc. v. EPA, No. 19-1140 (D.C. Cir.).
9 See Docket, Am. Lung Assoc. v. EPA, No. 19-1140 (D.C. Cir.).
10 GHGs in the atmosphere trap radiation as heat, warming the earth’s surface and oceans. The primary GHGs emitted
by humans (and estimated by EPA in its annual inventories) include CO2, methane, nitrous oxide, sulfur hexafluoride,
chlorofluorocarbons, hydrofluorocarbons, and perfluorocarbons. While both natural and human-related sources release
GHGs and influence climate, “current climate scientific assessment states high confidence (extremely likely) that
human influence is the dominant cause of the observed warming over the past half-century.” For additional discussion,
see CRS Report R45086, Evolving Assessments of Human and Natural Contributions to Climate Change, by Jane A.
Leggett.
11 In 2018 (the most recent year of available data), these emissions accounted for 75% of total U.S. GHG emissions.
See Table ES-2 in EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018, April 2020.
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Figure 1. GHG Emissions by Economic Sector
1990-2018
Source: Prepared by CRS; data from EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018, April
2020, Table 2-10, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-19902018.
Notes: Million metric tons of CO2 equivalent is used because GHGs vary by global warming potential (GWP).
GWP is an index developed by the Intergovernmental Panel on Climate Change (IPCC) that allows comparisons
of the heat-trapping ability of different gases over a period of time, typically 100 years. Consistent with
international GHG reporting requirements, EPA’s most recent GHG inventory (April 2020) uses the GWP
values presented in the IPCC’s 2007 Fourth Assessment Report. The IPCC has since updated the 100-year GWP
estimates, with some increasing and some decreasing.
CO2 emissions from fossil fuel combustion account for over 98% of the GHG emissions in the
electric power sector.12 Multiple factors have played a role in the CO2 emission decrease in the
electricity sector. One key factor is the electricity generation portfolio. Electricity is generated
from a variety of fuels and sources in the United States. Some fuels and sources—nuclear,
hydropower, and some renewables—directly produce no CO2 emissions with their electricity
generation. Fossil fuels, on the other hand, generate different amounts of CO2 emissions per unit
of generated electricity. The amount of CO2 emitted during fossil-fuel-fired electricity generation
is dependent upon the carbon content of the fuel and the efficiency of the generating unit in which
it is combusted, among other variables. For example, natural-gas-fired electricity from a
combined cycle unit typically yields approximately 43% of the CO2 emissions of coal-fired
12 See Table 2-11 in EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018, April 2020.
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electricity from a steam unit per kilowatt-hour of electricity.13 Therefore, shifting the U.S.
electricity generation portfolio to lower-emissions fuel sources and more efficient technologies
would likely (all else being equal) reduce CO2 emissions from the electricity sector, which in
turn, would likely reduce total U.S. GHG emissions. Figure 2 illustrates the changes in the
electricity portfolio from 2005 to 2019. Highlighted changes include the following:
Coal’s contribution to total electricity generation decreased from 50% to 23%.
Natural gas’s contribution to total electricity generation increased from 19% to
38%.
Non-hydro renewable energy (wind and solar) generation increased from 2% to
11%.
Figure 2. Percentage of Total Electricity Generation by Energy Source
2005-2019
Source: Prepared by CRS; data from EIA, Electric Power Monthly, Table 1.1, http://www.eia.gov/beta/epm/.
Notes: Renewable sources include wind, utility scale solar, wood fuels, landfill gas, biogenic municipal solid
waste, other biomass, and geothermal. Petroleum includes petroleum liquids and petroleum coke. Estimates of
small-scale solar generation are not included in the above figure. EIA started estimating this generation in 2014. If
estimated small-scale solar generation were included in the renewables generation for 2019, the percentage of
total generation for renewables (non-hydro) would increase from 11% to 12%.
Several factors likely played a role in these recent changes, including technological advances in
energy production (e.g., hydraulic fracturing) and federal and state policies, including federal tax
policies14 and states’ renewable portfolio standards.15 These factors have influenced the
13 For further discussion, see CRS Report R44090, Life-Cycle Greenhouse Gas Assessment of Coal and Natural Gas in
the Power Sector, by Richard K. Lattanzio.
14 See CRS Report R44852, The Value of Energy Tax Incentives for Different Types of Energy Resources, by Molly F.
Sherlock.
15 See, for example, Database of State Incentives for Renewables and Efficiency, Map of Renewable Portfolio Standard
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deployment of these technologies and resources and impacted the relative price differences
between energy sources, particularly coal, natural gas, and renewable sources. These market
forces have played a role in the retirement of coal-fired power plants: Between 2007 and 2018,
the number of coal-fired power plants decreased from 351 to 206, and according to the Energy
Information Administration (EIA), more retirements are planned in coming years.16
Q: How much progress has the United States made in reducing GHG
emissions and meeting emission targets?
A: Figure 3 illustrates total U.S. GHG emissions between 1990 and 2018. As the figure indicates,
U.S. GHG emissions increased 20% between 1990 and 2007. The economic downturn in 2008
and 2009 resulted in a decrease of energy consumption (including electricity) across all economic
sectors. This decline played a key role in the 10% decrease in emission levels during that time.
Between 2010 and 2017, emissions continued to decrease by 8%. Between 2017 and 2018,
emissions increased by 3% and were roughly equivalent to emission levels in 1995. As discussed
above, changes in the nation’s electricity generation portfolio played a key role in this more
recent decline.
In addition, Figure 3 compares recent U.S. GHG emission levels to the 2020 and 2025 emissions
goals previously made by the United States pursuant to the United Nations Framework
Convention on Climate Change’s 2009 Copenhagen Accord and 2015 Paris Agreement,
respectively.17 As the figure indicates, 2018 U.S. GHG emission levels were 10% less than 2005
emissions levels. For more information about trends in CO2 emissions from electricity generation
and the factors that impact emission levels in that sector, see CRS Report R45453, U.S. Carbon
Dioxide Emissions in the Electricity Sector: Factors, Trends, and Projections, by Jonathan L.
Ramseur. For an overview of U.S. energy issues, including U.S. energy consumption and changes
in the fuels used to generate electricity, see CRS Report R44854, 21st Century U.S. Energy
Sources: A Primer, coordinated by Michael Ratner.
Policies, as of June 2019, https://www.dsireusa.org/resources/detailed-summary-maps/.
16 EIA, Electric Power Annual, Table 4.1, https://www.eia.gov/electricity/annual/; and EIA, “More U.S. Coal-Fired
Power Plants Are Decommissioning as Retirements Continue,” July 26, 2019, https://www.eia.gov/todayinenergy/
detail.php?id=40212.
17 For more on U.S. commitments and pledges under the UNFCCC (U.S. Treaty Document 102-38), see CRS Report
R44092, Greenhouse Gas Pledges by Parties to the United Nations Framework Convention on Climate Change and
CRS Report R44609, Climate Change: Frequently Asked Questions About the 2015 Paris Agreement.
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Figure 3. U.S. GHG Emissions (Net)
Compared to 2020 and 2025 Emissions Targets
Source: Prepared by CRS; data from EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018,
2020, 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. See the note in
Figure 1regarding “Million metric tons of CO2-equivalent.”
Q: What are the Clean Air Act (CAA) Section 111 requirements?
A: CAA Section 111 requires EPA to establish nationally uniform, technology-based standards for
categories of industrial facilities, also referred to as stationary sources of air pollution.18 These
standards were intended to help prevent new pollution problems and to “level the playing field for
states competing for industrial growth,” for example, by removing incentives for states or
communities to weaken air pollution standards in order to attract industry.19
CAA Section 111(b) directs EPA to establish maximum emission levels (called New Source
Performance Standards, or NSPS) for new and modified major stationary sources—power plants,
steel mills, and smelters, for example. To set the emission levels, EPA determines the BSER that
has been “adequately demonstrated,” taking costs and any non-air-quality health and
environmental impacts and energy requirements impacts into account.20
Section 111 also addresses existing stationary sources of pollution. Section 111(d) requires EPA to
promulgate regulations, which EPA has historically referred to as “emission guidelines.”21 These
18 42 U.S.C. §7411(b).
19 Robert J. Martineau Jr. and Michael K. Stagg, “New Source Performance Standards,” in The Clean Air Act
Handbook, ed. Julie R. Domike and Alec C. Zacaroli, 4th ed. (Chicago: American Bar Association, 2016).
20 42 U.S.C. §7411(a)(1).
21 For emission guidelines promulgated prior to ACE, EPA defines emission guideline at Title 40, Section 60.21(e), of
the Code of Federal Regulations. For ACE and any future emission guidelines, EPA defines emission guideline at Title
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emission guidelines establish binding requirements that states must address when they develop
plans to regulate the existing sources, which EPA refers to as “designated facilities.”22 In
particular, states must establish performance standards reflecting the BSER for existing sources,
which is determined by EPA. States, in their plans, provide for implementation and enforcement
of the standards. EPA cannot compel a state to submit a state plan pursuant to CAA Section
111(d). However, if a state does not submit a satisfactory plan by EPA’s regulatory deadline,
CAA Section 111(d) directs EPA to prescribe a plan for the state, often described as a federal plan
(42 U.S.C. §7411(d)(2)).
Q: How does the CAA Section 111 define standards of performance and best
system of emission reduction?
A: The term standards of performance appears multiple times 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 non-air quality health and
environmental impact and energy requirements) the Administrator determines has been
adequately demonstrated.23
Under this definition, EPA must determine the BSER that is “adequately demonstrated,”
considering certain factors. Then, EPA or states, as applicable, must base the emissions standard
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.
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).24 For detailed discussion about EPA’s current interpretation of its authority to determine
the BSER under Section 111, see the questions and answers in the “Repeal of the Clean Power
Plan” section.
Q: What is a “state plan”?
A: A “state plan” refers to a plan that provides for the implementation and enforcement of CAA
Section 111(d) performance standards.25 For example, under the ACE rule, states are to develop
plans detailing the implementation and enforcement of performance standards for CO2 emissions
40, Section 60.21a(e).
22 42 U.S.C. §7411(d)(1). For EPA’s definition of designated facility for emission guidelines promulgated prior to
ACE, see 40 C.F.R. §60.21(b). For EPA’s definition of designated facility for ACE and any future emission guidelines
established after July 8, 2019, see 40 C.F.R. §60.21a(b).
23 CAA §111(a)(1), 42 U.S.C. §7411(a)(1).
24 See, for example, 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).
25 42 U.S.C. §7411(d)(1). States also prepare “state plans” under CAA Section 129, which authorizes air emission
limits for solid waste incineration units. See 42 U.S.C. §7429(b)(2).
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from coal-fired EGUs. In general, states develop Section 111 plans based on the emission
guidelines, which include the BSER determination, issued by EPA and in accordance with federal
procedural requirements and then submit them to EPA for review.26 The state plans approved by
EPA are published in federal regulatory code (40 C.F.R. Part 62).27 If a state does not submit a
satisfactory plan by EPA’s regulatory deadline, CAA Section 111(d) directs EPA to prescribe a
plan for the state, described as a federal plan in the ACE rule.28
Q: What is the difference between a “state plan” and a “state implementation
plan”?
A: These terms refer to plans developed by states under different sections of the CAA. A “state
plan” is a plan that provides for the implementation and enforcement of CAA Section 111(d)
performance standards.29 A “state implementation plan” (SIP) is the collection of regulations and
documents developed under CAA Section 110 to ensure compliance with federal air quality
standards, known as National Ambient Air Quality Standards (NAAQS).30
State plans and SIPs establish limits for different kinds of air pollutants and differ in scope of
sources covered.31 A SIP sets forth procedures for compliance with NAAQS for six pollutants,
known as “criteria pollutants” (carbon monoxide, lead, nitrogen dioxide, ozone, particulate
matter, and sulfur dioxide [SO2]).32 A SIP establishes an emissions budget for diverse emission
sources in the state, including power plants, industrial plants, incinerators, and motor vehicles.
The scope of a state plan is relatively narrower than a SIP, given that EPA has historically issued
Section 111(d) performance standards for “specialized types of emission sources that emit
discrete types of pollutants.”33 State plans apply to “designated pollutants,” which EPA has
defined to include performance standards for new sources under Section 111(b) and to exclude
criteria pollutants and hazardous air pollutants (HAPs).34 Examples of designated pollutants
26 EPA cannot compel a state to submit a state plan pursuant to CAA Section 111(d). If a state does not submit a
satisfactory plan by EPA’s regulatory deadline, CAA Section 111(d) directs EPA to prescribe a plan for the state (42
U.S.C. §7411(d)).
27 This part also contains federal plans issued for states that did not submit adequate plans.
28 42 U.S.C. §7411(d)(2).
29 42 U.S.C. §7411(d)(1). States also prepare “state plans” under CAA Section 129, which authorizes air emission
limits for solid waste incineration units (42 U.S.C. §7429(b)(2)).
30 42 U.S.C. §7410. See also EPA, Basic Information about Air Quality SIPs, https://www.epa.gov/sips/basicinformation-air-quality-sips.
31 EPA guidance explains that because “emissions standards applicable to industries on a nationwide basis” (such as
Section 111 performance standards and Section 112 National Emission Standards for Hazardous Air Pollutants) are
codified in the Code of Federal Regulations, they are not included in federally approved SIPs. EPA observed that while
states “typically adopt” federal emission standards into their SIPs, EPA does not adopt those provisions into the
federally approved SIP because such provisions are already enforceable through the federal Code of Federal
Regulations. See EPA, SIP Processing Manual, “What’s Not in a SIP,” https://cfpub.epa.gov/oarwebadmin/sipman/
sipman/mContent.cfm?chap=1&filePos=8.
32 42 U.S.C. §§ 7408(a)(1), 7410. For more information about NAAQS requirements, see CRS Report RL30853, Clean
Air Act: A Summary of the Act and Its Major Requirements, by Kate C. Shouse and Richard K. Lattanzio. For a
summary of current NAAQS for all six criteria pollutants and links to the history of standards for each of these
pollutants, see EPA, “NAAQS Table,” https://www.epa.gov/criteria-air-pollutants/naaqs-table.
33 See generally 40 C.F.R. Part 62. See also Martineau and Stagg, “New Source Performance Standards,” pp. 342-343.
34 40 C.F.R. §60.21(e).
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include sulfuric acid mist from sulfuric acid plants, fluoride emissions from phosphate fertilizer
plants, and nonmethane organic emissions from landfills.35
Q: What was the Clean Power Plan (CPP)?
A: EPA promulgated the CPP in 2015 to limit CO2 emissions from existing fossil-fuel-fired power
plants.36 EPA set national performance standards for CO2 emissions from existing fossil-fuel-fired
power plants under the authority of CAA Section 111(d). One national performance standard
would have applied to existing electric steam generating units (which are mostly coal), and the
other applied to existing stationary combustion turbines—for example, natural gas combined
cycle (NGCC) units. EPA based these standards on the BSER, a statutory term used to define a
performance standard under CAA Section 111. EPA determined the BSER for the CPP based on a
collection of measures that it referred to as three “building blocks”: (1) improving the heat rate at
coal-fired units, (2) shifting generation from coal-fired units to lower-emitting natural gas units,
and (3) shifting generation from fossil fuel units to renewable energy generation. The CPP also
set individual state targets for average emissions from existing power plants based on the CO2
performance standards. Although EPA set state-specific targets, states were to determine how to
reach these goals. For additional details about the CPP as EPA promulgated it in 2015, see CRS
Report R44341, EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked
Questions, by James E. McCarthy et al.
Q: Did the CPP ever take effect?
A: No. The CPP was the subject of ongoing litigation and was never implemented due to a stay
from the Supreme Court.37 The Court dismissed the litigation challenging the CPP as moot after
EPA finalized its repeal of the CPP and the ACE rule.38
Q: Did EPA promulgate GHG performance standards for new and modified
power plants under the CAA?
A: Yes. In 2015, EPA promulgated GHG performance standards for new and modified power
plants under CAA Section 111(b) concurrent to the 111(d) standards for existing plants in the
CPP.39 Once EPA lists a source category, such as fossil-fuel-fired EGUs, Section 111(b) requires
EPA to establish NSPS for new and modified sources within a listed source category.40 Once EPA
promulgates NSPS under Section 111(b) for new or modified sources in that category, Section
111(d) then directs EPA to establish procedures for the states to submit plans establishing
35 See generally 40 C.F.R. Part 62. See also Martineau and Stagg, “New Source Performance Standards,” pp. 342-343.
36 The pollutants regulated in the CPP and the ACE rule are GHGs with standards expressed in the form of CO
2 limits.
40 C.F.R. §60.5705a (for the ACE rule); 40 C.F.R. §60.5705(a) (for the repealed CPP). EPA, “Carbon Pollution
Emission Guidelines for Existing Stationary Sources: Final Rule,” 80 Federal Register 64661, October 23, 2015
(hereinafter CPP Final Rule).
37 The Supreme Court in 2016 stayed the implementation of the CPP pending resolution of the lawsuit challenging its
legality. Order in Pending Case, West Virginia v. EPA (S. Ct. No. 15A773, Feb. 9, 2016),
https://www.supremecourt.gov/orders/courtorders/020916zr_21p3.pdf.
38 Order, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Sept. 17, 2019).
39 EPA, “Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary
Sources: Electric Generating Units; Final Rule,” 80 Federal Register 64510, October 23, 2015.
40 42 U.S.C. §7411(b)(1).
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standards of performance for existing sources that would be subject to NSPS if they were new,
unless they are subject to an exclusion under Section 111(d).41
As promulgated in 2015, the NSPS for new and modified power plants would have relied in part
on carbon capture and sequestration (CCS) technology to reduce emissions by about 20%
compared to the emissions of what was then considered a state-of-the-art coal-fired plant without
CCS. Stakeholders challenged the 2015 GHG performance standards for new and modified power
plants in court, but the court paused the litigation pending completion of EPA’s review and any
resulting rulemaking.42
Q: What is the status of GHG performance standards for new and modified
power plants?
A: The GHG performance standards for new and modified power plants remain in effect, though
EPA proposed to revise them on December 6, 2018.43 The December 2018 proposal is a separate
rulemaking from the CPP repeal and ACE rulemakings.
In the December 2018 proposal for new and modified power plants, EPA determined that the
BSER for newly constructed coal-fired units would be the most efficient demonstrated steam
cycle in combination with the best operating practices from exiting units. This proposed BSER
would replace the determination from the 2015 rule, which identified the BSER as partial CCS.
According to the agency, “the primary reason for this proposed revision is the high costs and
limited geographic availability of CCS.”44 The semiannual regulatory agenda estimated a final
decision by December 2020.45 As of July 2020, EPA has not yet finalized this proposal. According
to EPA’s status report in the paused litigation challenging the 2015 GHG performance standards
for new and modified power plants, the agency continues to review the comments submitted on
the proposed rule and plans to send the final rule package to the Office of Management and
Budget (OMB) for interagency review in the early summer of 2020.46
41 42 U.S.C. §7411(d)(1). One of the legal issues raised in the CPP and ACE rule litigation challenges EPA’s
interpretation of CAA Section 111(d)(1)(A). This provision excludes, among other things, from Section 111(d)
regulation “any existing source for any air pollutant (i) for which air quality criteria have not been issued or which is
not included on a list published under section 108(a) or emitted from a source category which is regulated under [CAA]
section 112.” Id. The Section 108(a) exclusion refers to “criteria” air pollutants under the NAAQS program. Id.
§§7408-7410. The Section 108(s) exclusion does not apply because EPA has not listed GHGs as criteria pollutants.
Under the CPP, EPA explained that the Section 112 exclusion “does not bar the regulation under CAA section 111(d)
of non-HAP [hazardous air pollutants] from a source category, regardless of whether that source category is subject to
standards for HAP under CAA section 112.” CPP Final Rule at 64711-15. See also Section 112 Exclusion discussion in
CRS Report R44480, Clean Power Plan: Legal Background and Pending Litigation in West Virginia v. EPA, by Linda
Tsang. Petitioners that challenged the CPP and are challenging the ACE rule argue that sources, and not air pollutants,
regulated under other CAA Section 112 to limit HAPs, such as existing fossil-fuel-fired EGUs, are excluded from
EPA’s scope of Section 111(d) authority. Id. See also “Q: What are the main legal issues in the litigation?”
42 EPA Status Report, North Dakota v. EPA at 3-4, No. 15-1381 (D.C. Cir. Apr. 24, 2020). In 2017, the court ordered
the petitions for review of the 2015 GHG performance standards for new and modified power plants to be held in
abeyance (paused) pending further order of the court.
43 EPA, “Review of Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed
Stationary Sources: Electric Utility Generating Units,” 83 Federal Register 65424, December 20, 2018.
44 Additional information, including a link to the proposed rule, a fact sheet, and an economic impact analysis, can be
found at https://www.epa.gov/stationary-sources-air-pollution/proposal-nsps-ghg-emissions-new-modified-andreconstructed-egus.
45 Office of Management and Budget (OMB), Semiannual Regulatory Agenda, EPA, RIN 2060-AU58, Spring 2020,
https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202004&RIN=2060-AU58.
46 EPA Status Report, North Dakota v. EPA at 4, No. 15-1381 (D.C. Cir. Apr. 24, 2020). In 2017, the court ordered the
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Q: Do the CPP repeal and ACE rules have implications for EPA’s other GHG
rulemakings or the endangerment finding?
A: In 2009, EPA issued two findings under CAA Section 202, referred to collectively as the
“GHG endangerment finding.” EPA found (1) that GHGs currently in the atmosphere potentially
endanger public health and welfare and (2) that new motor vehicle emissions cause or contribute
to that pollution.47 EPA subsequently promulgated regulations under CAA authority to limit GHG
emissions from motor vehicles, the power sector, the oil and gas industry, and other sources.
Neither the CPP repeal nor the promulgation of the ACE rule reconsiders EPA’s 2009 GHG
endangerment finding.48 Without reconsidering the GHG endangerment finding, EPA appears to
have a continuing obligation to limit GHG emissions under the CAA.49 Separate from the CPP
repeal and ACE rulemaking, EPA has proposed specific changes to other GHG regulations,
including those for motor vehicles and for the oil and gas sector. For a brief overview of these
proposed changes, see CRS Report R45451, Clean Air Act Issues in the 116th Congress, by James
E. McCarthy, Kate C. Shouse, and Richard K. Lattanzio.
Repeal of the Clean Power Plan
Q: Why did EPA repeal the CPP?
A: EPA bases the CPP repeal on a change in its legal interpretation of its authority under CAA
Section 111 from its interpretation in the CPP. EPA concluded that the CPP exceeded CAA
statutory authority in setting the BSER as a combination of on- and off-site emission reduction
measures that applied to the entire existing source category.50 Because the CPP BSER was based,
in part, on “beyond-the-source” measures (i.e., measures that apply to the source category as a
whole or to entities entirely outside the regulated source category), EPA, after reconsidering the
relevant statutory text, structure, and purpose of CAA Section 111, asserts that the CPP
petitions for review of the 2015 GHG performance standards for new and modified power plants to be held in abeyance
(paused) pending further order of the court. Id. at 3-4.
47 Specifically, EPA’s first finding was that “elevated concentrations of greenhouse gases in the atmosphere may
reasonably be anticipated to endanger the public health and to endanger the public welfare of current and future
generations.” 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 and 66516, December 15, 2009. The Supreme Court
upheld EPA’s “endangerment finding” in Util. Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014).
48 In the lawsuits challenging the CPP and the ACE rule, petitioners claimed that EPA failed to make the required
endangerment finding under CAA Section 111 and that EPA could not rely on the endangerment finding that it made in
2009 in the context of CAA Section 202 for motor vehicles. See, for example, Brief of Pac. Legal Found., Tex. Pub.
Policy Found., Morning Star Packing Co., Merit Oil Co., Loggers Ass’n of N. Cal., and Norman Brown in Supp. of
Pet’rs 20-24, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Feb. 23, 2016) (challenging the CPP); Statement of Issues
to be Raised by Petitioner Texas Public Policy Foundation, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Oct, 7,
2019) (challenging the ACE rule).
49 See Massachusetts v. EPA, 549 U.S. 497, 533 (2007) (“Under the clear terms of the Clean Air Act, EPA can avoid
taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides
some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do.”).
50 The CPP repeal is one of three separate and distinct rulemakings published in the same Federal Register notice. The
CPP repeal is published at pp. 32522-32 in EPA, “Repeal of the Clean Power Plan; Emission Guidelines for
Greenhouse Gas Emissions from Existing Electric Utility Generating Units; Revisions to Emission Guidelines
Implementing Regulations,” 84 Federal Register 32534, July 8, 2019. Hereinafter, “CPP repeal” refers to pp. 32522-32
of this Federal Register notice.
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“significantly exceeded” its authority.51 Based on this revised interpretation, EPA repealed the
CPP and limited the BSER in the ACE rule to emission reduction measures that owners and
operators can apply directly on site at individual existing EGUs.
In the CPP repeal and ACE rule, EPA contends that it has discretion to change its interpretation of
its legal authority so long as it provides a “reasonable explanation” for the change.52 The Supreme
Court has explained that “[a]gencies are free to change their existing policies as long as they
provide a reasoned explanation for the change…. But the agency must at least ‘display awareness
that it is changing position’ and ‘show that there are good reasons for the new policy.’ … [A]n
‘[u]nexplained inconsistency’ in agency policy is ‘a reason for holding an interpretation to be an
arbitrary and capricious change from agency practice.’”53
Q: How has EPA’s interpretation of Section 111 authority changed from its
interpretation in the CPP?
A: EPA’s interpretation of its CAA Section 111 authority in the ACE rule is narrower than its
previous interpretation in the CPP. As discussed above, CAA Section 111(a) requires standards of
performance to reflect the emissions reductions achievable through “application” of the BSER. In
the CPP, EPA reasoned that the “system” in the BSER reflected the “overall source category,”
taking into account the “unique characteristics of CO2 pollution and the unique, interconnected
and interdependent manner in which affected EGUs and other generating sources operate within
the electricity sector.”54 Under this interpretation, EPA based the CPP BSER for existing fossilfuel-fired EGUs on three “building blocks”: (1) improving the heat rate at coal-fired units, (2)
shifting generation to lower-emitting natural gas units, and (3) shifting generation from fossil fuel
units to renewable energy generation.55
In the CPP repeal, EPA presents a different view of its authority to determine the BSER under
Section 111. EPA asserts that the “application” of the BSER referenced in CAA Section 111(a)
“unambiguously limits the BSER to those systems” that can be “applied” or “put into operation at
a building, structure, facility, or installation.”56 In other words, EPA contends that the CAA does
not authorize the agency to select as the BSER measures that apply to the source category as a
whole or to entities entirely outside the regulated source category. EPA states that the CPP
“beyond-the-source” approach “ignored or misinterpreted” the plain text of the CAA that “clearly
precluded the unsupportable reading” of Section 111 used in the CPP to choose emission
reduction measures that are not directly applied to the regulated EGU.57
To support its interpretation that the BSER must be source-specific, EPA points to an “explicit
statutory link” between the CAA’s Section 165 Prevention of Significant Deterioration (PSD)
permitting program and Section 111 standards.58 Section 111 emission standards (as derived from
51 CPP Repeal, p 32523.
52 ACE Final Rule, p. 32523.
53 Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125-26 (2016), quoting
FCC v. Fox Television Stations, Inc.,
556 U.S. 502, 515 (2009) and National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U.S.
967, 981 (2005) (internal citations omitted).
54 CPP Final Rule, p. 64726.
55 See “Q: What was the Clean Power Plan (CPP)?” for a discussion of the CPP “building blocks.”
56 CPP Repeal, p. 32524.
57 CPP Repeal, p. 32527.
58 CPP Repeal, p. 32525.
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the BSER) act as a “floor” (minimum) for emission limits in PSD permits.59 The permitting
authority bases the PSD emission limits only on source- or facility-specific best available
emission control technologies. EPA contends that if Section 111 emission standards are the
“floor” for source-specific emission limits in PSD permits, EPA must base the BSER (and the
emission standards established by applying the BSER) only on what is achievable at an individual
source.60 In comparison, in the CPP, EPA did not apply PSD program policies or interpretations to
its BSER determination because it interpreted the PSD permitting program as distinct from
Section 111(d) emission guidelines.61 In the CPP, EPA observed that the PSD permitting program
applies to individual modified or new sources in contrast to Section 111(d) guidelines that apply
to an entire source category.62
The ACE rule and the CPP also diverge in their interpretation of the Section 111(d) provision that
allows states to consider the “remaining useful life of an existing source” and “other factors”
when “applying” a standard of performance to a particular source. In the ACE rule, EPA interprets
this provision to allow states to consider these factors when “establishing” emission standards,
including the costs of implementing heat rate improvement (HRI) and technical feasibility.63 EPA
acknowledges that consideration of such factors could result in source-specific emission
standards “that reflect a value of HRI that falls outside” the emission reduction ranges that EPA
identified for each technology.64 The CPP, in contrast, allowed states to consider these factors
only when determining how to apply the national emission standards to existing EGUs and
prohibited states from making “adjustments” to the mandatory statewide emission reduction goals
based on these source-specific factors.65
Q: Has anyone challenged the CPP repeal in court?
A: Yes. Parties have filed petitions in the U.S. Court of Appeals for the D.C. Circuit challenging
CPP repeal and the ACE rule as of July 8, 2019.66 See “Litigation Challenging the CPP Repeal
and the ACE Rule” below for questions related to the litigation.
Affordable Clean Energy (ACE) Final Rule
Q: What is the ACE rule?
A: The final ACE rule establishes emission guidelines for states to use when they develop and
submit plans to EPA that establish standards to reduce CO2 emissions67 from existing coal-fired
59 42 U.S.C. §7479(3).
60 CPP Repeal, p. 32525.
61 EPA, Response to Comments, CPP Final Rule, chap. 1.2, pp. 100-01.
62 EPA, Response to Comments, CPP Final Rule, chap. 1.2, pp. 100-01.
63 ACE Final Rule, p. 32549.
64 ACE Final Rule, p. 32549.
65 CPP Final Rule, p. 64870.
66 See Petition for Review, Am. Lung Assoc. v. EPA, No. 19-1140 (D.C. Cir. July 8, 2019).
67 In the ACE rule, EPA states that the “air pollutant regulated in this final action is GHGs. However, the standards in
this rule are expressed in the form of limits solely on emissions of CO2, and not the other constituent gases of the air
pollutant GHGs.” CPP Repeal, p. 32534. See 40 C.F.R. §60.5705a.
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units. The ACE rule’s emission guidelines present EPA’s BSER determination for CO2 emissions
from existing coal-fired EGUs.68
Q: Why did EPA promulgate the ACE rule?
A: EPA’s promulgation of NSPS GHG standards for new and modified EGUs under CAA Section
111(b) triggered the requirements for existing sources under CAA Section 111(d).69 Repeal of the
CPP—the 111(d) rulemaking that EPA promulgated concurrent to the GHG NSPS in 2015—
meant that EPA had to promulgate a new rule to fulfill its obligation under CAA Section 111(d)
for existing sources.
Q: To whom does the ACE rule directly apply?
A: The final ACE rule directs the governor (or the governor’s designee) of each state in the
contiguous United States to submit a state plan to EPA by July 8, 2022.70 A state plan should
establish standards of performance based on the BSER for designated facilities in that state’s
jurisdiction and provide for the implementation and enforcement of those standards. The final
rule also requires states in the contiguous United States without any designated facilities (i.e.,
coal-fired EGUs) to submit a “negative declaration letter” to EPA in lieu of a state plan. EPA
expects state plan submissions from 43 of the 48 contiguous states and negative declarations from
the remaining five (California, Idaho, Maine, Rhode Island, and Vermont).71
The final ACE rule does not explain why its emission guidelines do not apply to non-contiguous
states.72 The 2015 CPP final rule likewise did not apply to non-contiguous states. The final CPP
rule stated that EPA did not have the information or tools required to establish the BSER in noncontiguous states and U.S. territories, concluding that it would determine how to address CAA
Section 111(d) requirements in those areas at a later date.73
Q: What types of facilities are affected by the final rule?
A: Under the ACE rule, state plans will establish CO2 performance standards for each “affected
steam generating unit,” which EPA refers to as a “designated facility.”74 EPA defined designated
facility as a coal-fired electric utility steam generating unit (coal-fired EGU) that was in operation
or had commenced construction on or before January 8, 2014, exceeds a specified nameplate
capacity and base load rating, and burns coal for more than 10% of the average annual heat input
during the three previous calendar years.75
EPA did not establish the BSER for integrated gasification combined cycle (IGCC) units, oil- or
natural-gas-fired utility boilers, or fossil-fuel-fired stationary combustion turbines and therefore
68 ACE Final Rule, p. 32521.
69 EPA described the existing Section 111(b) requirements as the “requisite predicate for applicability of CAA section
111(d).” ACE Final Rule, p. 32533.
70 40 C.F.R. §60.5710a and §60.5800a.
71 ACE Final Rule, p. 32573.
72 Similarly, the preamble to the 2018 ACE proposal does not discuss why it excludes non-contiguous states.
73 For additional discussion, see CRS Report R44341, EPA’s Clean Power Plan for Existing Power Plants: Frequently
Asked Questions, by James E. McCarthy et al.
74 40 C.F.R. §60.5700a.
75 ACE Final Rule, p. 32533. See also 40 C.F.R. §60.5805a.
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excluded these EGUs from the definition of designated facility.76 For more information, see “Q:
Why didn’t EPA establish a BSER for other fossil-fuel-fired units?”
Q: What is the BSER under the ACE rule?
A: EPA determined that efficiency improvements, also known as “heat rate improvements” or
HRI, are the BSER to reduce CO2 emissions from existing coal-fired EGUs.77
The “heat rate” measures the amount of energy that a power plant uses to generate one kilowatthour of electricity.78 A power plant with a lower, more efficient heat rate uses less fuel to generate
the same amount of electricity as a power plant with a higher heat rate. Using less fuel per
kilowatt-hour may result in lower emissions of CO2 as well as lower levels of SO2 and nitrogen
oxides (NOx).79
HRI is affected by a number of factors, such as the age and type of EGU. For more information,
see CRS Report R43343, Increasing the Efficiency of Existing Coal-Fired Power Plants, by
Richard J. Campbell. For more information about HRI and potential emission impacts, see “Q:
Would the ACE rule’s HRI lead to potential “rebound effects”?”
EPA identified other “systems of GHG emission reduction”—such as natural gas co-firing, use of
biomass, and CCS—that the agency concluded did not meet the criteria for the BSER.80 For
information about EPA’s consideration of natural gas co-firing, see “Q. Why did EPA exclude
natural gas co-firing from the BSER?” For information about EPA’s consideration of biomass,
CCS, and other systems of GHG emission reduction, see “Q: Can states use emission reduction
measures outside the “candidate technologies” list to establish the ACE rule’s performance
standards?”
Q: What are the ACE rule’s performance standards for CO2 emissions?
A: Similar to the ACE proposal, the final ACE rule does not establish a binding, numeric
performance standard for CO2 emissions from existing coal-fired units. Rather, EPA established a
list of candidate technologies, comprising six HRI measures and improved operation and
maintenance practices, which states “must evaluate in establishing a standard of performance for
that source in their state plans under CAA section 111(d).”81 As in the proposal, the final ACE
rule presents ranges of expected HRI improvements for the candidate technologies, expressed as a
percentage improvement, for three size-based categories of coal-fired EGUs.82 The estimated
potential HRI improvements for the six candidate technologies at existing coal-fired EGUs ranges
76 ACE Final Rule, p. 32533. See also 40 C.F.R. §60.5780a
77 ACE Final Rule, p. 32532.
78 EIA, Analysis of Heat Rate Improvement Potential at Coal-Fired Power Plants, May 19, 2015, https://www.eia.gov/
analysis/studies/powerplants/heatrate/.
79 EIA, Analysis of Heat Rate Improvement Potential at Coal-Fired Power Plants.
80 ACE Final Rule, pp. 32543-32549. EPA clarified that states can use natural gas co-firing as a compliance measure,
however. See ACE Final Rule, p. 32555.
81 ACE Final Rule, p. 32536.
82 For final rule, see ACE Final Rule, Table 1, p. 32537. For proposal, see ACE Proposal Table 1, p. 44757.
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from 0.1% to 2.9%.83 States must ultimately establish a rate-based standard. They also have the
option to establish performance standards reflecting an HRI “that falls outside of these ranges.”84
Q: Why did EPA not establish a numeric or presumptively approvable CO2
performance standard in the ACE rule?
A: EPA discussed several reasons why it did not establish a numeric CO2 performance standard or
specify a standard that, while not required, would meet the requirements for EPA approval (i.e.,
“presumptively approvable”). First, EPA asserted that “CAA Section 111(d)(1) squarely places
the responsibility of establishing a standard of performance for an existing designated facility on
the state as part of developing a state plan.”85 Second, EPA determined that it could not establish
national performance standards due to variation among existing coal-fired units.86 Factors that
may affect HRI potential for a particular unit include, but are not limited to, the EGU’s “past and
projected utilization rate, maintenance history, and remaining useful life.”87 Third, EPA concluded
that states are best positioned to account for site-specific considerations that influence HRI
potential.88
According to EPA, many commenters supported this “unit-specific, state-led” approach because
“it is not possible to adopt uniform, nationally applicable standards of performance based on
implementation of particular HRI technologies because each individual unit is subject to a unique
combination of factors that can affect the unit’s heat rate and HRI potential, many of which are
geographically driven and outside the control of a source.”89 EPA noted that Section 111(d) of the
CAA directs the agency “to permit states to take such factors into consideration as they develop
plans to establish performance standards for existing sources within their jurisdiction.”90
Other commenters disagreed with this “unit-specific, state-led” approach and viewed it as
inconsistent with the CAA legislative history as well as past practice to determine BSER based on
a specific emission reduction technology. These commenters concluded that the unit-specific,
state-led approach would not result in significant emission reductions. EPA disagreed, responding
that designating a “specific set of emission reduction technologies” and operational practices as
the BSER are consistent with the statute. EPA responded further that this approach “recognizes
the challenges of applying a single specific emission reduction technology within such a diverse
population of designated facilities.”91
Some commenters maintained that EPA has a statutory responsibility to establish the level of
stringency for the performance standards. According to EPA, these commenters stated that “EPA
is legally obligated to identify ‘the degree of emission limitation achievable through the
application of the [BSER]’ (i.e., a level of stringency) because such degree of emission limitation
is inextricably linked with the determination of the BSER, which is the EPA’s statutory role and
83 ACE Final Rule, p. 32537.
84
ACE Final Rule, p. 32538.
85 ACE Final Rule, p. 32550.
86 ACE Final Rule, p. 32536.
87 ACE Final Rule, p. 32536.
88 ACE Final Rule, pp. 32535-6.
89 ACE Final Rule, pp. 32535-6.
90 ACE Final Rule, p. 32536.
91 ACE Final Rule, p. 32536.
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responsibility.”92 EPA responded that the ACE rule’s presentation of ranges of expected HRI
improvements fulfills the agency’s statutory obligation to specify the “level of emissions
reductions achievable using the candidate technologies.”93
The lack of a numeric performance standard introduces uncertainty about the level of stringency
expected from implementation of HRI measures under the ACE rule. EPA reported that
“numerous” state and industry commenters requested a presumptive standard or additional clarity
about the CO2 performance standards. Other states commented that they “heartily approve” of the
CPP repeal and of aspects of the proposed ACE rule, in particular that, in their view, the proposal
affords “the States sufficient flexibility to comply with federal environmental mandates without
disrupting the flow of affordable, reliable electricity to their citizens and the nation as a whole.”94
The National Association of Clean Air Agencies (NACAA), which represents air pollution control
agencies in 35 states, the District of Columbia, four territories and 116 metropolitan areas,95
recommended that EPA provide states “presumptively approvable” language for state plans as
well as “presumptively approvable standards.”96 NACAA commented that such presumptively
approvable language or standards “need not restrict state flexibilities” and that “EPA could
present these as options in the rule and specify in all cases that states remain free to craft
alternative compliance approaches consistent with the emission guidelines.”97
EPA did not identify “presumptively approvable” standards in the final ACE rule. EPA concluded
that it was “reasonable” for the agency to present “the ‘degree of emission limitation achievable
through application of the BSER’ as a set of ranges of values, rather than a single number, that
reflects application of the candidate technologies as a whole,” given that source-specific factors
may result in “varying degrees of reductions” when implementing the BSER at a particular unit.98
Q: What are the candidate technologies under the ACE rule?
A: EPA finalized a list of “candidate technologies”—six HRI measures and improved operating
and maintenance (O&M) procedures—that constitute the BSER.99 Under the ACE rule, states
“will consider” the candidate technologies and “other factors when establishing unit-level
standards of performance.”100
92 ACE Final Rule, p. 32537.
93 ACE Final Rule, p. 32537. See ACE Final Rule, Table 1, p. 32537, for ranges of the percentage of potential HRI
improvement.
94 CRS did not identify comments from these states regarding their views on presumptively approvable standards. See
letter from the States of West Virginia, Alabama, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan,
Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, Wisconsin, and Wyoming
and the Mississippi Department of Environmental Quality and the Mississippi Public Service Commission to EPA,
ACE rulemaking docket, EPA-HQ-OAR-2017-0355-24627, October 31, 2018, pp. 6-9, https://www.regulations.gov/.
95 As of March 2020. See NACAA, “About NACAA,” http://www.4cleanair.org/about.
96
NACAA recommends that “[a]t a minimum” EPA “provide example calculations that convert sample HRI
percentages drawn from EPA’s candidate technologies, both individually and in combination, across a representative
inventory of sources into the rate-based CO2/MWh emission rate standard EPA is requiring for the performance
standards.” Letter from NACAA to EPA, ACE rulemaking docket, EPA-HQ-OAR-2017-0355-23788, October 31,
2018, p. 4, https://www.regulations.gov/.
97 Letter from NACAA to EPA, p. 4.
98 ACE Final Rule, p. 32538.
99 ACE Final Rule, pp. 32536-37.
100 ACE Proposal, p. 44757.
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The candidate technologies list has not changed from the ACE proposal.101 It includes the
following:
Neural Network/Intelligent Sootblowers
Boiler Feed Pumps
Air Heater and Duct Leakage Control
Variable Frequency Drives
Blade Path Upgrade (Steam Turbine)
Redesign/Replace Economizer
Improved O&M Practices.
According to EPA, these are the “most impactful” candidate technologies “because they can be
applied broadly and are expected to provide significant HRI without limitations due to geography,
fuel type, etc.”102 EPA estimated that HRI potential from the six HRI measures on the candidate
technologies list ranges from 0.1% to 2.9%, and that HRI potential from O&M practices may
range from zero to less than 2.0% depending on the unit’s historical O&M practices.103
The two candidate technologies reported in the EPA analysis showing highest HRI potential are
steam turbine blade upgrades and the redesign/replacement of the economizer for cooling system
heat recovery. These two technologies also have, according to EPA, the greatest potential of the
candidate technologies to trigger preconstruction permitting requirements under the NSR
program.104 EPA has asserted, based on stakeholder comments, that “if such HRI trigger NSR, the
resulting requirements for analysis, permitting, and capital investments will greatly increase the
cost of implementing those HRI technologies and, in the absence of NSR reforms, states will be
more likely to determine that those technologies are not cost-effective when analyzing ‘other
factors’ in determining a standard of performance for an individual facility.”105
EPA has proposed, but not yet finalized, a revision to the applicability test for certain power
plants under NSR. EPA stated in the final ACE rule that it intends to take final action on the
proposed NSR changes at a later date.106 EPA decided to retain the two candidate technologies—
steam turbine blade upgrades and redesign/replace economizer—on the final list of candidate
technologies because the agency “still expects these technologies to be generally applicable
across the fleet of existing EGUs, and because the costs of the technologies are generally
economical and reasonable.”107 EPA estimated the potential impact of applying the candidate
technologies and projected “modest” emission changes under the ACE rule policy scenario
compared to the reference scenario. See “Q: What CO2 emission effects did EPA estimate from
the CPP repeal and from the ACE rulemakings?” For more information about EPA’s
determination that HRI is the best system of emission reduction to reduce CO2 emissions from
101 ACE Proposal, p. 44757.
102 ACE Final Rule, p. 32536.
103 ACE Final Rule, p. 32537.
104 The NSR program generally requires emission limits based on the best available control technology when new
facilities are built or when existing facilities make a change that increases emissions above specified thresholds.
Historically, NSR applicability determinations have been contentious and extensively litigated.
105 ACE Final Rule, p. 32537.
106 ACE Final Rule, p. 32521.
107 ACE Final Rule, p. 32537.
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existing coal-fired EGUs. For the agency’s consideration of other systems of GHG emission
reduction, see “Q: What is the BSER under the ACE rule?”
The final ACE rule does not limit states’ consideration of performance standards to the candidate
technologies list, though EPA clarified that certain measures, such as biomass co-firing, cannot be
used for compliance. See “Q: Can states use emission reduction measures outside the “candidate
technologies” list to establish the ACE rule’s performance standards?” for additional discussion.
Q: How will states establish CO2 emission performance standards?
A: Although the ACE rule does not require a specific method for states to develop performance
standards, EPA described two steps that it views as a “reasonable” approach for states to follow
and document in their state plans.108 First, EPA expects states to establish unit-specific CO2
performance standards by calculating an emissions rate reflecting application of the BSER—that
is, the candidate technologies—at each unit.109 For example, a state might apply the BSER to a
designated facility’s average emission rate from the previous three years or to a projected
emission rate under specific conditions.110 Second, states have discretion to tailor the emission
rates based on site-specific considerations, such as remaining useful life and cost.111 That is, states
are to consider the candidate technologies listed as the BSER—including EPA’s estimated ranges
of HRI potential—but states may calculate a performance standard for a particular unit that falls
outside of the range of EPA’s estimated HRI potential due to site-specific factors.112 Under EPA’s
current interpretation of CAA Section 111(d), states may establish performance standards that are
less stringent than the “standard that would result from a direct application of the BSER identified
by the EPA.”113
EPA also clarified that a state may determine that one or more of the six candidate technologies
“should not be part of the methodology to calculate the EGU’s standard of performance because
of remaining useful life or other factors.”114
Finally, the ACE final rule requires states to set a rate-based standard in the form of an allowable
emission rate.115
Q: Can states establish CAA Section 111(d) performance standards less
stringent than otherwise expected from implementing the BSER?
A: EPA interprets the CAA as requiring the agency to allow states to establish Section 111(d)
performance standards that, based on site-specific considerations, are less stringent than the
“standard that that would result from a direct application of the BSER identified by the EPA.”116
The agency based this interpretation on CAA Section 111(d)(1)(B), which directs EPA to
108 EPA clarified that states may conduct these steps sequentially or concurrently. ACE Final Rule, p. 32550.
109 ACE Final Rule, pp. 32549-50.
110 ACE Final Rule, p. 32550.
111 ACE Final Rule, pp. 32550, 32551.
112 ACE Final Rule, p. 32551.
113 ACE Final Rule, p. 32553.
114 EPA noted that the state should document its rationale and analysis, for example, “by explaining that such
technology has already been implemented by a particular source.” ACE Final Rule, p. 32550.
115 ACE Final Rule, p. 32555.
116 ACE Final Rule, pp. 32553, 32570.
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promulgate federal regulations that “shall permit the State in applying a standard of performance
to any particular source under a plan submitted under this paragraph to take into consideration,
among other factors, the remaining useful life of the existing source to which such standard
applies.”117 EPA concluded that “Congress explicitly envisioned under CAA section 111(d)(1)(B)
that states could implement standards of performance that vary from the EPA’s emission
guidelines under appropriate circumstances.”118
Prior to the ACE rule, the general regulations implementing CAA Section 111(d) specified that
state plans for health-based pollutants must be as stringent as the emission guideline established
by EPA unless the state demonstrates, on a case-by-case basis, that a source meets certain
factors.119 Previously referred to as the “variance provision,”120 it allowed a state to apply less
stringent standards for health-based pollutants if the state demonstrated any of the following
factors applied to a particular emission source:
unreasonable cost of control resulting from plant age, location, or basic process
design;
physical impossibility of installing necessary control equipment; or
other factors specific to the facility (or class of facilities) that make application of
a less stringent standard or final compliance time significantly more
reasonable.121
EPA noted that promulgation of this provision predated the statutory language in CAA Section
111(d)(1)(B) that “the EPA permit states to take into account remaining useful life and other
factors.”122 As part of the new implementing regulations for Section 111(d) that EPA promulgated
with the ACE rule, the agency included a provision intended to reflect CAA Section 111(d)(1)(B).
The new provision, codified at Title 40, Section 60.24a(e), of the Code of Federal Regulations,
incorporates the statutory phrase remaining useful life but otherwise presents the same sourcespecific factors that were previously codified at Section 60.24(f). The new provision reads as
follows:
(e) In applying a standard of performance to a particular source, the State may take into
consideration factors, such as the remaining useful life of such source, provided that the
State demonstrates with respect to each such facility (or class of such facilities):
(1) Unreasonable cost of control resulting from plant age, location, or basic process design;
(2) Physical impossibility of installing necessary control equipment; or
(3) Other factors specific to the facility (or class of facilities) that make application of a
less stringent standard or final compliance time significantly more reasonable.123
117 42 U.S.C. §7411(d)(1)(B).
118 ACE Final Rule, p. 32570.
119
40 C.F.R. §60.24(f).
120 EPA referred to the provision at Title 40, Section 60.24(f), of the Code of Federal Regulations as the “variance
provision” prior to promulgation of ACE. EPA stated that it will no longer refer to this section or its corollary under the
new implementing regulations as the “variance provision.” Instead, EPA will refer to these provisions as “remaining
useful life and other factors.” ACE Final Rule, p. 32570.
121 40 C.F.R. §60.24(f). Paragraph c specifies that state plans for health-based pollutants must be as stringent as the
emission guideline established by EPA.
122 ACE Final Rule, p. 32570.
123 40 C.F.R. §60.24a(e).
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The final rule requires a state that factors remaining useful life or other site-specific
considerations into their determination of performance standards to “describe, justify, and
quantify how the considerations were made in its plan.”124
States may also consider factors not listed in Section 60.24a(e), provided the state “adopts a
reasonable approach and adequately explains that approach in its submission to the EPA.”125 In
describing the codified list of site-specific factors as “nonexclusive,” EPA concluded that it is not
possible to define “each and every circumstance that states may consider when applying a
standard of performance under CAA section 111(d).”126 EPA provided examples of other sitespecific factors that may “influence decisions to invest in technologies to meet a potential
performance standard,” including “timing considerations like expected life of the source, payback
period for investments, the timing of regulatory requirements, and … space or other physical
barriers to implementing certain HRIs at specific units.”127 EPA concluded that ultimately “many
of these ‘other factors’ that can affect the application of the BSER candidate technologies distill
down to a consideration of cost.”128
Q: What are the next steps to implement the ACE rule and what is the
timeline?
A: States are to develop performance standards for designated facilities—that is, existing, coalfired EGUs129—in their jurisdictions and establish these performance standards through state
plans.130 States will also provide for the implementation and enforcement of the performance
standards in the state plans. State plans are due to EPA by July 8, 2022.131
EPA is to determine whether a state plan is complete within 60 days of receiving the plan but no
later than six months of receipt.132 Within 12 months of the completeness determination, EPA is to
determine whether the plans are “satisfactory” under CAA Section 111(d)(2)(A) and either
approve or disapprove the plan or portion of the plan through a notice-and-comment
rulemaking.133 EPA is to promulgate a federal plan if (1) the state fails to submit a plan, (2) EPA
determines that the state plan is incomplete, or (3) EPA disapproves the state plan.134 After
determining that any of these circumstances applies, EPA has two years to issue the federal plan.
This schedule for state and federal plans is specified in the implementing regulations for CAA
Section 111(d). For discussion about changes to this schedule promulgated in the ACE rule, see
124 ACE Final Rule, p. 32554.
125 ACE Final Rule, p. 32571.
126 40 C.F.R. §60.24a(e). See also ACE Final Rule, pp. 32553, 32571.
127 ACE Final Rule, p. 32553.
128 ACE Final Rule, p. 32553.
129 For purposes of ACE, EPA defined designated facility as a coal-fired electric utility steam generating unit (coal-
fired EGU) that commenced construction as of January 8, 2014, exceeds a specified nameplate capacity and base load
rating, and burns coal for more than 10% of the average annual heat input during the three previous calendar years.
EPA clarified that a “designated facility refers to a single EGU that is affected” by the ACE emission guidelines. ACE
Final Rule, p. 32533.
130 The final rule also requires states in the contiguous United States without any designated facilities to submit a
“negative declaration letter” to EPA in lieu of a state plan. 40 C.F.R. §§60.5710a, 60.5800a.
131 40 C.F.R. §§60.5710a, 60.5800a.
132 40 C.F.R. §60.27a(g).
133 40 C.F.R. §60.27a(b). See also ACE Final Rule, p. 32568.
134 40 C.F.R. §60.27a(c). See also ACE Final Rule, p. 32568.
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“Q: What changes did EPA make to the schedules for submission and review of state plans and
federal plans?”
Q: When do existing coal-fired EGUs have to comply with performance
standards established by states under the ACE rule?
A: The date that the performance standards go into effect will be determined by each state’s plan.
As previously noted, states will first need to develop performance standards for each affected unit
in their jurisdictions and provide for implementation and enforcement through the state plans.
State plans that contain compliance schedules longer than two years from the date of state plan
submission to EPA must also include provisions for increments of progress.135 Prior to the ACE
rule, the requirement to include provisions for “increments of progress” applied to plans with
compliance schedules longer than 12 months from the date of submission to EPA.136 EPA updated
timing criteria for this requirement to align with the changes it finalized to the schedule of state
plan submission and EPA review. For information about these schedule changes, see “Q: What
changes did EPA make to the schedules for submission and review of state plans and federal
plans?”
Q: What information must a state include in the state plan submission for
existing coal-fired units?
A: State plans must establish Section 111(d) performance standards for designated units and
provide for their implementation and enforcement.137 First, to document establishment of
performance standards, state plans are to explain how the state applied the BSER to each source
and how the state considered other factors, such as remaining useful life, into the determination of
the unit-specific standard.138 State plans “must adequately document and demonstrate the process
and underlying data used to establish standards of performance” under the ACE rule so that EPA
can “understand and replicate” the state’s calculations.139 In particular, a state plan must identify
each EGU within the state’s jurisdiction that is subject to the ACE rule along with the emissions
and operational data used to establish the performance standard for each unit. A state that
considers the remaining useful life of a unit must “specify the exact date by which” the unit will
no longer supply electricity to the grid.140 States that determine that HRI are not feasible at any
particular unit must present the basis for that conclusion, including supporting data or metrics.
Second, each state plan must specify how the state will implement and enforce the performance
standards so that “EPA can review and identify measures that assure transparent and verifiable
implementation.”141 According to EPA, state plans should demonstrate that the performance
standards will be “quantifiable, permanent, verifiable, and enforceable.”142
135 EPA regulations define increments of progress as “steps to achieve compliance which must be taken by an owner or
operator of a designated facility.” 40 C.F.R. §60.21a(h). See also ACE Final Rule, p. 32568.
136 40 C.F.R. §§60.24(e)(1), 60.21(h).
137 ACE Final Rule, p. 32558.
138 EPA, Fact Sheet: The Affordable Clean Energy Rule, 2019, https://www.epa.gov/sites/production/files/2019-06/
documents/bser_and_eg_fact_sheet_6.18.19_final.pdf.
139 ACE Final Rule, p. 32558.
140 A state may revise the state plan if the retirement date changes. ACE Final Rule, p. 32558.
141 ACE Final Rule, p. 32558.
142 ACE Final Rule, p. 32559.
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Q: How does the ACE rule interact with existing GHG emission reduction
programs in the states, such as the Regional Greenhouse Gas Initiative and
California’s climate policies?
A: Various U.S. states have already required power sector GHG emission reductions. California
established a cap-and-trade program that took effect in 2013. California‘s cap covers multiple
GHGs, which account for approximately 85% of California’s GHG emissions.143 In addition to its
emissions cap, California has adopted a range of other climate change mitigation policies (e.g.,
renewable energy portfolio standards).144
A coalition of states from the Northeast and Mid-Atlantic regions established the Regional
Greenhouse Gas Initiative (RGGI).145 RGGI is a cap-and-trade system that took effect in 2009
and currently involves 10 states.146 RGGI applies to CO2 emissions from electric power plants
with capacities to generate 25 megawatts or more. While each state adopts its own regulations
implementing RGGI, most have promulgated regulations similar to a model rule.
In addition, Massachusetts has adopted GHG emission requirements beyond its commitment to
RGGI.147 Pursuant to the 2008 Massachusetts Global Warming Solutions Act, the state’s
Department of Environmental Protection promulgated regulations in 2017 requiring GHG
emission reductions from several specific source categories.
Some states raised concerns about how the ACE rule will interact with existing state and local
programs. The interaction of the ACE rule and state and local GHG reduction programs has
implications for state planning efforts. For example, it may be more efficient for states to rely on
existing, non-federal GHG emission reduction programs to fulfill the ACE rule requirements
rather than implementing separate state and federal standards for the same emission sources.
NACAA observed that the ACE proposal was “silent on this topic” and described it as a “critical
and complex issue for many air agencies.”148 NACAA requested EPA to ensure the final ACE rule
“does not interfere with existing state and local programs including cap-and-trade programs and
state-level GHG reduction goals” and that the ACE rule does not “prevent states from choosing to
go further in stringency than the federal standard.”149
Additional state coalitions provided perspectives on federal-state interactions under the ACE rule.
For example, the National Conference of State Legislatures commented that the proposed ACE
rule would provide “significant authority and flexibility to states, allowing them to work within
an overall framework while taking into account state and regional differences, ensuring sufficient
flexibility for each state to determine how to best achieve nationally set goals.”150 Similarly, a
143 For more details, see the California Air Resources Board, “Cap-and-Trade Program,” https://www.arb.ca.gov/cc/
capandtrade/capandtrade.htm.
144 See California Air Resources Board, “Cap-and-Trade Program.”
145 See CRS Report R41836, The Regional Greenhouse Gas Initiative: Background, Impacts, and Selected Issues, by
Jonathan L. Ramseur.
146 Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey (rejoined in 2020), New
York, Rhode Island, and Vermont.
147 For more information, see Massachusetts Department of Environmental Protection, Background Document on
Proposed, New and Amended Regulation, 2016, https://www.mass.gov/guides/reducing-ghg-emissions-under-section3d-of-the-global-warming-solutions-act.
148 Letter from NACAA to EPA, pp. 4-5.
149 Letter from NACAA to EPA, pp. 4-5.
150 The National Conference of State Legislatures (NCSL) represents the legislatures of states, territories, and
commonwealths in the United States. Letter from NCSL to EPA, ACE rulemaking docket, EPA-HQ-OAR-2017-0355-
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coalition of states commented that the proposed ACE rule affords “the States sufficient flexibility
to comply with federal environmental mandates without disrupting the flow of affordable, reliable
electricity to their citizens and the nation as a whole.”151
The final ACE rule does not prohibit states from implementing GHG programs under state
authority. It is unclear, though, whether state plans that incorporate RGGI or other non-federal
GHG emission reduction programs will meet the ACE rule requirements. First, EPA stated that it
does not “prejudge the approvability of a state plan.”152 Second, the agency questioned whether it
has statutory authority to approve state plans that include standards more stringent than those that
would result from application of the BSER. While EPA found “merit” in some commenters’ view
that the agency lacks authority to approve state plans establishing more stringent standards, the
agency did not specify whether it agrees with this view.153 Instead, EPA concluded it would
consider this question as it evaluates an individual state plan.154
EPA asserted that regardless of stringency, the agency lacks statutory authority to approve state
plan requirements on entities other than existing, coal-fired EGUs—that is, those units qualifying
as designated facilities under the ACE rule. According to EPA, CAA Section 111(d)(1) “clearly
contemplates that state plans may only contain requirements for existing sources, and not other
entities.”155
Q: Can states use emission reduction measures outside the “candidate
technologies” list to establish the ACE rule’s performance standards?
A: States may rely on measures that are not on the candidate technologies list to establish
performance standards in their state plans provided that the measures meet EPA’s criteria.156
EPA’s criteria are as follows:
(1) The compliance measures must be capable of being applied to and at the source and (2)
compliance measure must be measurable at the source using data, emissions monitoring
equipment or other methods to demonstrate compliance, such that they can be easily
monitored, reported, and verified at the unit. 157
CCS is one example of an emission reduction measure excluded from the candidate technologies
list that states may use as a compliance measure in state plans. EPA concluded that although CCS
is not “broadly applicable to the entire existing coal-fired power plant fleet,” it may be a
“technically feasible and an economically viable control option … under very specific
circumstances.”158 Natural gas co-firing is another example.159 (For more information about why
23602, October 31, 2018, pp. 1-2, https://www.regulations.gov/.
151 Letter from the States of West Virginia, Alabama, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana,
Michigan, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, Wisconsin, and
Wyoming; the Mississippi Department of Environmental Quality; and the Mississippi Public Service Commission to
EPA, ACE rulemaking docket, October 31, 2018, EPA-HQ-OAR-2017-0355-24627, pp. 6-9
https://www.regulations.gov/.
152
ACE Final Rule, p. 32560.
153 ACE Final Rule, p. 32560.
154 ACE Final Rule, p. 32560.
155 ACE Final Rule, p. 32560.
156 ACE Final Rule, p. 32555.
157 ACE Final Rule, p. 32555.
158 ACE Final Rule, pp. 32547-48.
159 ACE Final Rule, p. 32555.
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EPA excluded natural gas co-firing from the BSER, see “Q. Why did EPA exclude natural gas cofiring from the BSER?”).
EPA prohibited certain measures from use in state plans as compliance measures based on its
conclusion that they do not meet the compliance measure criteria. These measures are biomass
co-firing and averaging-and-trading.160 EPA concluded that biomass co-firing did not meet the
criteria because the “biomass firing in and of itself does not reduce emissions of CO2 emitted
from that source. Specifically, when measuring stack emissions, biomass emits more CO2 per Btu
than fossil fuels, thereby increasing the CO2 emission rate at the source.”161
The prohibition of averaging-and-trading—either across units at the same plant or between units
located at different plants—as a compliance measure in the final rule marks a partial change from
proposal. EPA had proposed to allow states to include in their plans “emissions averaging among
[affected] EGUs across a single facility” but not between affected and non-affected units or
between units at separate facilities.162 EPA’s definition of an individual EGU as a “designated
facility” in the final rule led the agency to conclude that it could not allow emissions averaging
across EGUs at the same plant. EPA concluded that it lacks authority to allow states to average
emissions across multiple “designated facilities,” even if such units are located at the same
plant.163 That is, EPA’s “determination that individual EGUs are subject to regulation under the
ACE rule precludes the Agency from attempting to change the basic unit from an EGU to a
combination of EGUs for purposes of the ACE rule implementation.”164
EPA stated more broadly that “trading is not permissible under CAA section 111.” EPA concluded
that trading is not consistent with its current interpretation that CAA Section 111 requires a
system of emission reduction to “be applied to and at an individual source and would lead to
emission reductions from that source.” EPA observed that “the nature of trading as a compliance
mechanism is such that some sources would not need to apply any pollution control techniques at
all in order to comply with a cap-and-trade scheme.”165
Q. Why did EPA exclude natural gas co-firing from the BSER?
A. EPA excluded natural gas co-firing166 from the ACE rule BSER based on its conclusion that a
BSER based on natural gas co-firing would: (1) cost more than applying the HRI candidate
technologies, (2) encourage inefficient use of natural gas, and (3) pose greater costs and
160 ACE Final Rule, p. 32555.
161 ACE Final Rule, pp. 32547, 32557-58. Stakeholders disagree about whether particular types of biomass are carbon
neutral. EPA is developing a proposed action to establish the treatment of biogenic CO2 emissions from the use of
certain biomass feedstocks at stationary sources under various CAA programs. See OMB, Semiannual Regulatory
Agenda, EPA, RIN 2060-AU03, Fall 2019, https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201910&
RIN=2060-AU03; OMB, Semiannual Regulatory Agenda, EPA, RIN 2060-AU03, Spring 2020,
https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202004&RIN=2060-AU03. A discussion of this topic is
beyond the scope of this report. For more information about biomass, see CRS Report R41603, Is Biopower Carbon
Neutral?, by Kelsi Bracmort.
162 ACE Proposal, p. 44767.
163 ACE Final Rule, pp. 32556-7.
164 ACE Final Rule, p. 32556.
165 ACE Final Rule, p. 32557.
166 According to EPA in the ACE rule, natural gas co-firing refers to the period when coal-fired utility boilers use
natural gas for startup operations, for maintaining the unit in “warm standby,” or for nitrogen oxide control (either
directly as a combustion fuel or in configuration referred to as natural gas reburn). ACE Final Rule, p. 32544.
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challenges for units that currently have limited or no access to natural gas.167 Among other things,
EPA analyzed fuel use data from the EIA. EPA concluded that while “nearly 35 percent of coalfired units” co-fired with natural gas in 2017, few of the units co-fired natural gas in an amount
greater than 5% of the total annual heat input, suggesting to EPA that most of the natural gas was
used as a secondary fuel for unit startup or to maintain the unit in “warm standby” rather than as a
primary fuel to generate electricity.168 While EPA excluded natural gas co-firing from the BSER,
the agency also noted that states may use natural gas co-firing as a compliance measure in state
plans.169 For more information about use of non-BSER measures for compliance, see “Q: Can
states use emission reduction measures outside the “candidate technologies” list to establish the
ACE rule’s performance standards?”
Stakeholder views regarding BSER and natural gas co-firing varied. Some stakeholders
commented that natural gas co-firing should not be part of the BSER under the ACE rule because,
for example, natural gas co-firing is not sufficiently cost-effective, there may not be a reliable
supply of gas to co-fire, or it could negatively affect the unit’s heat rate.170 Other stakeholders
disagreed and recommended natural gas co-firing as the BSER, based partly on analysis of the
same fuel use data from EIA. According to EPA, these stakeholders concluded that natural gas cofiring at coal plants is “technically feasible, readily available, achieves significant emission
reductions, and may be the most cost-effective option for some facilities.”171 One stakeholder
estimated that “a highly cautious approach to increasing natural gas co-firing would more than
double the emissions reductions under ACE” and observed that the costs of co-firing are
comparable to the costs of heat rate improvements.172
Q: Why didn’t EPA establish a BSER for other fossil-fuel-fired units?
A: EPA determined that it lacks “adequate information” to establish a BSER for other types of
existing fossil-fuel-fired units, such as IGCC units and natural-gas-fired power plants.173 (Naturalgas-fired power plants, such as NGCC units, are also referred to as stationary combustion
turbines.174) EPA reported that it “is still evaluating the data for EGUs not covered by the ACE
167 ACE Final Rule, p. 32545.
168 ACE Final Rule, p. 32543.
169 ACE Final Rule, p. 32555.
170 EPA, EPA’s Responses to Public Comments on the EPA’s Proposed Emission Guidelines for Greenhouse Gas
Emissions From Existing Electric Utility Generating Units, June 2019, https://www.regulations.gov (Document ID
EPA-HQ-OAR-2017-0355-26741, hereinafter “ACE RTC”). See chap. 4, p. 7.
171 Some stakeholders also recommended that EPA include natural gas co-firing on the list of HRI candidate
technologies. ACE Final Rule, p. 32544.
172 See Resources for the Future, 10 Big Little Flaws in EPA’s Affordable Clean Energy Rule, July 2019, pp. 4-5,
https://www.rff.org/documents/2138/IB_19-05_Burtraw_Keyes_4.pdf; and Resources for the Future, Letter to EPA
Docket, EPA-HQ-OAR-2017-0355-25898, October 31, 2018, p. 24, https://www.regulations.gov.
173 ACE Final Rule, p. 32533. IGCC technology uses a gasifier to turn a feedstock—for example, coal or other carbonbased feedstock—into pressurized gas, which then fuels a combined cycle turbine to generate electricity. According to
the National Energy Technology Laboratory, coal is the most commonly used feedstock in IGCC operations. See
National Energy Technology Laboratory, “Commercial Power Production Based on Gasification,”
https://www.netl.doe.gov/research/Coal/energy-systems/gasification/gasifipedia/igcc. The ACE final rule defines IGCC
as “a combined cycle facility that it designed to burn fuels containing 50 percent (by heat input) or more solid-derived
fuel not meeting the definition of natural gas plus any integrated equipment that provides electricity or useful thermal
output to either the affected facility or auxiliary equipment.” 40 C.F.R. §60.5805a.
174 Stationary combustion turbines that are used to generate electricity are generally fueled by natural gas. The ACE
final rule defines simple cycle and combined cycle units as stationary combustion turbines. It defines stationary
combustion turbine as the equipment “that provides electricity or useful thermal output to the combustion turbine
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rule,” noting that “only a handful” of IGCC units are in operation.175 EPA stated that it “may issue
emission guidelines” for stationary combustion turbines at a later date.176
Comment letters revealed support for and opposition to EPA’s decision not to identify a BSER for
stationary combustion turbines in the ACE rule. According to EPA, some commenters observed
that “natural gas-fired stationary combustion turbines are already highly efficient” and concluded,
among other things, that “available emission reductions at natural gas-fired stationary combustion
turbines would likely be expensive or would likely provide only small overall reductions.”177
Other commenters disagreed with EPA’s decision and, according to EPA, these commenters
stated that because EPA issued regulations under Section 111(b) for new natural-gas-fired turbines
(including both simple cycle and combined cycle natural gas units), EPA is required under
Section 111(d) to issue emission guidelines for the same category of existing natural gas units.178
Commenters that favored setting a BSER for stationary combustion turbines further
recommended that EPA consider various technology options, including HRI, natural gas co-firing,
CCS, and generation shifting.179
Commenters likewise expressed varying opinions regarding EPA’s conclusion that it lacks
“adequate information” to determine the BSER for existing stationary combustion turbines.
According to EPA, some commenters who supported EPA’s determination cited a “lack of
information currently in the record.”180 For example, commenters stated that the cost is rarely
reported for “hot gas path upgrades,” which they described as a “key action to improve gas
turbine performance” but with “limited applicability.”181 Other commenters, though, pointed to
information contained in rulemaking records—for example, public comments and analyses
developed through the 2015 rulemakings for new and modified EGUs and the CPP—and asserted
that EPA has not explained why the available information is “insufficient for the EPA to include
HRI technologies at gas-fired plants in the BSER.”182 Commenters noted, according to EPA, that
the agency’s decision not to establish a BSER in the ACE rule “is not based on a reasoned
rejection of the evidence or any thoughtful conclusion that the described emission reduction
opportunities are not adequately demonstrated.”183
engine, heat recovery system or auxiliary equipment.” For the complete definitions, including the types of equipment
specified, see 40 C.F.R. §60. 5805a.
175 ACE RTC, see chap. 2, p. 12.
176 ACE RTC, see chap. 2, p. 27.
177 ACE RTC, see chap. 2, p. 23. Others suggest that older combustion turbines may not be as efficient as NGCC units.
See, for example, Darrell Proctor, “Efficiency Improvements Mark Advances in Gas Turbines,” Power Magazine,
January 3, 2018, https://www.powermag.com/efficiency-improvements-mark-advances-in-gas-turbines/; and S. C.
Bhatia, “Cogeneration,” in Advanced Renewable Energy Systems (New Delhi, India: Woodhead Publishing India,
2014), pp. 490-508.
178 Commenters stated that the GHG endangerment finding and the 2015 promulgation of CO performance standards
2
under CAA Section 111(b) for new and modified fossil-fuel-fired EGUs requires EPA to issue emission standards for
existing stationary combustion turbines and IGCC units. ACE RTC, see chap. 2, p. 12.
179
ACE RTC, see chap. 2, pp. 13-21. EPA stated that “because basing BSER on generation shifting is precluded by
CAA section 111, the Agency is repealing the CPP and cannot consider generation shifting as part of the BSER in any
future action” (ACE RTC, chap. 2, p. 20). For more information about EPA’s interpretation of CAA Section 111, see
“Repeal of the Clean Power Plan.”
180 According to EPA, “Commenters stated that the Agency should not set a BSER for NGCCs given the lack of
information currently in the record.” ACE RTC, see chap. 2, p. 13.
181 ACE RTC, see chap. 2, p. 12.
182 ACE RTC, see chap. 2, p. 14.
183 ACE RTC, see chap. 2, p. 14.
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Litigation Challenging the CPP Repeal and the ACE
Rule
Q: Who is challenging the CPP Repeal, the ACE rule, and the revised
implementing regulations?
A: The American Lung Association and the American Public Health Association were the first
parties to file a petition for review of the CPP repeal, ACE rule, and revised implementing
regulations (the “rules”) in the D.C. Circuit on the day the rules were published in the Federal
Register, July 8, 2019.184 Soon after, 22 states, the District of Columbia, and seven municipalities
filed petitions for review.185 The State of Nevada has intervened in support of the petitioning
states and municipalities, raising the number of states challenging the rules to 23 states.186 See
Figure 4 for states involved in the litigation. As identified in litigation documents,187 other
petitioners challenging the rules include 11 environmental organizations,188 several energy trade
associations,189 six power companies, and an association of power companies.190 Many of the
petitioners challenging the rules intervened in support of EPA in the litigation challenging the
CPP.191 Collectively, the court refers to this group of petitioners as the “Coordinating
Petitioners.”192 Various stakeholders have submitted briefs as amici curiae in support of these
petitioners.193 Several Members of Congress filed amici curiae briefs opposing the CPP repeal
and ACE rule.194
184 See Petition for Review, Am. Lung Ass’n v. EPA, No. 19-1140 (D.C. Cir. July 8, 2019).
185 See Petition for Review, New York v. EPA, No. 19-1165 (D.C. Cir. Aug. 13, 2019) (California, Colorado,
Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New
Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin,
the District of Columbia, City of Boulder, City of Chicago, City of Los Angeles, City of New York, City of
Philadelphia, and City of South Miami). The City and County of Denver filed a separate petition for review. City and
County of Denver, Colorado v. EPA, No. 19-1777 (D.C. Cir. Sept. 4, 2019).
186 The State of Nevada voluntarily withdrew its petition for review and intervened in support of the other petitioning
states and municipalities. See Orders, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Nov. 18-19, 2019) (granting
motion to voluntarily dismiss Nevada’s petition for review, No. 19-1189; granting motion to intervene in support of the
state and municipalities petitioners).
187 Unopposed Motion of Coordinating Petitioners for Extension and Modification of Briefing Schedule, Am. Lung
Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Mar. 19, 2020).
188 See Petition for Review, Appalachian Mountain Club v. EPA, No. 19-1166 (D.C. Cir. Aug. 14, 2019); Chesapeake
Bay Foundation, Inc. v. EPA, No. 19-1173 (D.C. Cir. Aug. 29, 2019);
189 See Petition for Review, Am. Wind Energy Ass’n, and Solar Energy Industries Ass’n v. EPA, No. 19-1173 (D.C.
Cir. Sept. 6, 2019); Petition for Review, Biogenic CO2 Coalition v. EPA, No. 19-1185 (D.C. Cir. Sept. 5, 2019);
Advanced Energy Economy v. EPA, No. 19-1186 (D.C. Cir. Sept. 6, 2019).
190 Consolidated Edison, Inc. v. EPA, No. 19-1188 (D.C. Cir. Sept. 6, 2019).
191 See CRS Report R44480, Clean Power Plan: Legal Background and Pending Litigation in West Virginia v. EPA, by
Linda Tsang for discussion of parties involved in the CPP litigation.
192 Order, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Mar. 23, 2020).
193 See, e.g., State and Muni. Petitioners’ Opening Brief at v-vi, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Apr.
17, 2020) (listing amici curiae that notified the court that they would submit briefs in support of the Coordinating
Petitioners).
194 See Brief for Members of Congress as Amici Curiae in Support of Petitioners, Am. Lung Ass’n. v. EPA, No. 191140 (D.C. Cir. Apr. 24, 2020) (opposing the CPP repeal); Brief for U.S. Senators Sheldon Whitehouse, Jeff Merkley,
Kirsten Gillibrand, Brian Schatz, and Edward J. Markey as Amici Curiae in Supporting the State and Muni. Petitioners,
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Several coal and mining companies and industry groups are challenging EPA’s underlying
authority to issue the ACE rule under CAA Section 111(d).195 And the Biogenic CO2 Coalition is
petitioning EPA’s refusal to recognize biogenic CO2 emission from biomass fuel as carbon
neutral or exempt from regulation under the ACE rule.196 Under CAA Section 307(b), the
deadline for filing a petition for review of the rules with the D.C. Circuit was September 6,
2019.197 The court has consolidated all the petitions into one lead case, American Lung
Association v. EPA.198
Figure 4. States and Municipalities Participating in the ACE Rule and CPP Repeal
Litigation
Consolidated Petitions: American Lung Ass’n v. EPA, No. 19-1140 (D.C. Circuit)
Source: Prepared by CRS from litigation filing in American Lung Ass’n v. EPA, No. 19-1140 (D.C. Cir.).
Notes: The map also includes the petitioner, District of Columbia.
Pub. Health and Envtl. Petitioners, Power Co. Petitioners, and Clean Energy Trade Ass’n. Petitioners, Am. Lung Ass’n.
v. EPA, No. 19-1140 (D.C. Cir. Apr. 24, 2020) (opposing the ACE rule).
195 See Petition for Review, Westmoreland Mining Holdings LLC v. EPA, No. 1176 (D.C. Cir. Sept. 5, 2019); Petition
for Review, North Am. Coal Corp. v. EPA, No. 19-1179 (D.C. Cir. Sept. 5, 2019); Robinson Enterprises, Inc. v. EPA,
No. 19-1175 (D.C. Cir. Sept. 6, 2019).
196 See Petition for Review, Biogenic CO2 Coalition v. EPA, No. 19-1185 (D.C. Cir. Sept. 5, 2019).
197 42 U.S.C. §7607(b).
198 Clerk’s Order, Am. Lung Ass’n v. EPA, No. 19-1140 (D.C. Cir. Sept. 2019) (issuing various orders consolidating
petitions through September 11, 2019).
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Q: Who are the respondents and intervenors in support of the rules?
A: Respondents in the litigation are EPA and its Administrator (as of July 2020), Andrew
Wheeler, in his official capacity.199 Parties that have intervened in support of respondents include
21states.200 See Figure 4. In total, 44 states, seven cities, and the District of Columbia are
participating in the litigation.201
Other parties intervening in support of the EPA include three labor unions, a public utility
commission, a number of rural electric cooperatives and an association representing them, several
industry and trade groups, and more than a dozen fossil-fuel-related companies and local electric
utilities.202 The National Association of Home Builders has submitted an amicus curiae brief in
support of the respondents.203
Petitioning states, municipalities, and public health and environmental organizations have
intervened on behalf of EPA to defend the agency’s underlying CAA authority to issue the ACE
rule and oppose a regulatory exemption or relaxation of emission standards for biogenic CO2
emissions.204
Q: What are the main legal issues in the litigation?
A: Petitioners challenge various aspects of the CPP repeal and the ACE rule as “arbitrary,
capricious and not in accordance with law.”205 Under CAA Section 307(d), a court may reverse an
199 See Joint Proposal on Briefing Schedule and Format by EPA and Other Parties, No. 19-1140 (D.C. Cir. Dec. 18,
2019). The Department of Justice represents the respondents.
200 See Order, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Nov. 18, 2019) (granting motions to intervene by
Alabama, Alaska, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana,
Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia, Wyoming). The
State of West Virginia led a coalition of 20 states, not including North Dakota, to intervene in support of the ACE rule
and CPP repeal. Motion of West Virginia and 20 States, State Officers, and State Agencies to Intervene as
Respondents, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Sept. 12, 2019). The State of North Dakota intervened
separately. North Dakota’s Motion to Intervene, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Sept. 6, 2019).
201 The six states not participating in the litigation at this time are Arizona, Florida, Idaho, Iowa, New Hampshire, and
Tennessee. Of these six states, Idaho is the only state that does not have any affected EGUs under the ACE rule. ACE
Final Rule, p. 32573.
202 Orders, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Sept. 11, 2019, Nov. 18, 2019) (granting motions to
intervene by various industry groups and associations and power companies).
203 Brief of Amicus Curiae National Association of Home Builders in Support of Respondents, Am. Lung Ass’n. v.
EPA, No. 19-1140 (D.C. Cir. June 23, 2020).
204 Order, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Nov. 18, 2019) (granting motions to intervene by various
industry groups and associations and power companies). See Initial Brief for Pub. Health and Envtl. RespondentInterverors at 20, Am. Lung Ass’n. v. EPA, No. 19-1140 (July 16, 2020) (arguing that “neither science nor law
supports Biogenic Petitioner’s claims that biomass combustion is categorically carbon neutral, or that EPA lacks
authority to regulate biogenic emissions.”) [hereinafter Public Health and Env’tl Intervernors’ Br.].
205 See, e.g., State and Muni. Petitioners’ Opening Brief at 22, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Apr.
17, 2020) [hereinafter States and Muni. Pet’rs Br.] Although several petitioners also challenged EPA’s revised Section
111 implementing regulations in their petitions for review and statement of the issues, these petitioners did not set forth
their legal arguments related to the revised implementing regulations in their briefs. See, e.g., State and Muni.
Nonbinding Statement of Issues at 6, New York v. EPA, No. 19-1165 (consolidated with No. 19-1140) (D.C. Cir Oct.
7, 2019); Public Health and Env’tl Petitioners’ Joint Nonbinding Statement of Issues at 8, Am. Lung Ass’n. v. EPA,
Nos. 1140, 1166 (D.C. Cir. Oct. 7, 2019); Petitioner’s Nonbinding Statement of Issues at 8, Chesapeake Bay Found.,
Inc. v. EPA, (D.C. Cir. Oct. 7, 2019). In general, petitioners forfeit a legal argument if they fail to raise that argument in
their brief. See Petit v. Dep’t of Educ., 675 F.3d 769, 779 (D.C. Cir. 2012) (ruling appellants waived a legal claim that
was not raised in their opening brief); New York v. EPA, 413 F.3d 3, 20 (2005) (“That [legal] argument was not made
by industry petitioners in their opening brief and is therefore waived.”).
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agency action that the court finds to be, among other things, “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law” or “without observance of procedure
required by law.”206 This section highlights some of the petitioners’ legal arguments presented in
their opening briefs but does not provide a comprehensive preview of the petitioners’ legal issues
presented to the court for or against the rules.207
Various legal issues raised in the litigation challenging the CPP repeal and the ACE rule,
including the scope of EPA’s authority and its interpretation of the BSER under CAA Section
111, were central to the legal challenges to the CPP. For example, Coordinating Petitioners argue
that the CPP repeal and ACE rule are unlawful because EPA interpreted CAA Section 111 as
unambiguously limiting the BSER to measures that can be installed and implemented at each
individual existing coal-fired EGU.208 In the CPP, EPA asserted that the “system” in the BSER
reflected the “overall source category” of fossil-fuel-fired EGUs, taking into account the “unique
characteristics of CO2 pollution and the unique, interconnected and interdependent manner in
which affected EGUs and other generating sources operate within the electricity sector.”209
In contrast, in the CPP repeal and the ACE rule, EPA reasons that the CPP “beyond-the-source”
approach “ignored or misinterpreted” the plain text of the CAA that “clearly precluded the
unsupportable reading” of Section 111 used in the CPP to choose emission reduction measures
that are not directly applied to the regulated EGU.210 In its brief, EPA further argues that the CPP
adopted an “impermissibly broad view of EPA’s authority” that “cannot be correct” because,
among other reasons, Congress provided no “clear statement” delegating such broad authority to
EPA.211 Intervening state and industry groups support EPA’s arguments and further assert that the
CPP repeal must be upheld to avoid “displac[ing] traditional state authority over energy
generation” and “the serious constitutional question of whether Congress can delegate those
fundamental policy decisions to EPA.”212
EPA’s interpretation of the scope of its authority to consider various emission reduction measures
in determining the BSER was a divisive issue among the parties in the CPP litigation.213
206 42 U.S.C. §7607(d)(9).
207 See States and Muni. Pet’rs Br.; Initial Opening Brief of Public Health & Envtl. Petitioners, Am. Lung Ass’n. v.
EPA, No. 19-1140 (D.C. Cir. Apr. 17, 2020) [hereinafter Public Health and Env’tl Pet’rs Br.]; Opening Brief of
Petitioners American Wind Energy Ass’n, Advanced Energy Economy, & Solar Energy Ind. Ass’n, Am. Lung Ass’n.
v. EPA, No. 19-1140 (D.C. Cir. Apr. 17, 2020) [hereinafter AWEA Br.]; Opening Brief of Petitioners Consolidated
Edison, Inc., Exelon Corp., Nat’l Grid USA, N.Y. Power Auth., Power Cos. Climate Coal., Pub. Serv. Enterprise Grp.
Inc., & Sacramento Muni. Util. Dist., Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Apr. 17, 2020) [hereinafter
Consol. Edison Br.]; Initial Brief for Petitioner Biogenic CO2 Coalition, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C.
Cir. Apr. 17, 2020) [hereinafter Biogenic CO2 Br.]; Brief of Petitioner Robinson Enter., Inc. et al., Am. Lung Ass’n. v.
EPA, No. 19-1140 (D.C. Cir. Apr. 17, 2020) [hereinafter Robinson Br.]; Coal Industry Petitioners Opening Brief,
Westmoreland Mining Holdings LLC & N. Am. Coal Corp. v. EPA, Nos. 19-1176 & No. 1179, (and consolidated
cases) (D.C. Cir. Apr. 17, 2020) [hereinafter Coal Indus. Br.]. This report does not address the legal issues that amici
curiae have raised in their briefs in support of the Coordinating Petitioners.
208
See, e.g., States and Muni. Pet’rs Br. at 23-26; Public Health and Env’tl Pet’rs Br. at 15-19; AWEA Br. at 5-14;
Consol. Edison Br. at 8-17.
209 CPP Rule, p. 64726.
210 CPP Repeal, p. 32527.
211 Proof Brief for the U.S. EPA, and EPA Admin. Andrew Wheeler at 50, 97-108, Am. Lung Ass’n. v. EPA, No. 191140 (June 16, 2020) [hereinafter EPA Brief].
212 Proof Brief for State and Industry Intervenors for Respondent in Support of the Clean Power Plan Repeal at 3-4,
Am. Lung Ass’n. v. EPA, No. 19-1140 (July 16, 2020).
213 See CRS Report R44480, Clean Power Plan: Legal Background and Pending Litigation in West Virginia v. EPA, by
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Coordinating Petitioners are also challenging EPA’s selection of HRI as the BSER in the ACE
rule. Coordinating Petitioners argue that EPA (1) unreasonably limited the BSER to heat rate
improvements and (2) “arbitrarily dismissed” measures such as generation-shifting from fossil
resources to lower- or zero emission resources, using carbon capture, and reducing use of highemitting sources when determining the BSER.214 Because EPA rejected these measures from the
BSER determination, Coordinating Petitioners allege that the BSER fails to reduce adequately
CO2 emissions from existing EGUs.215 In its brief, EPA maintains that the “only systems available
across the fleet, at reasonable cost, were the suite of heat rate improvement methods EPA selected
as the BSER” and that its BSER determination is “rational and supported by the record.”216
Intervening state and industry groups support EPA’s BSER determination and further argue that
the ACE rule “correctly reflects that BSER targets improvements to a source’s emissions
performance, not a reduction in total emissions from a source or source category.”217
Coordinating Petitioners also challenge the limits and responsibilities the ACE rule places on the
states. For example, they argue that EPA erroneously limited (1) the compliance measures that
states may include in their state plans and (2) the state’s ability to include emission standards that
are more stringent than the BSER.218 Certain petitioners assert that restricting the states’ ability to
adopt standards more stringent than the BSER is inconsistent with CAA Section 116,219 which
provides that nothing in the CAA denies the states the right “to adopt or enforce (1) any standard
or limitation respecting emissions of air pollutants or (2) any requirement respecting control or
abatement of air pollution” so long as such standard, limitation, or control is at least as stringent
as one “in effect under an applicable implementation plan or under section 7411” of the act.220 In
response, EPA argues that the petitioners’ claims that the ACE rule restricts state implementation
options are unripe for judicial review because EPA has not taken final agency action on a state
plan (i.e., approve or disapprove a state plan).221
Further, petitioners allege that EPA failed to set CO2 emission limits for existing gas-fired power
plants in the ACE rule as required by CAA Section 111(d).222 The scope of sources covered under
Section 111(d) includes “any existing source” that would be subject to NSPSs under Section
111(b) if it was newly constructed.223 Because EPA has issued NSPSs under CAA Section 111(b)
for new natural-gas-fired turbines (including both simple cycle and combined cycle natural gas
units), petitioners assert that EPA is required under Section 111(d) to issue emission guidelines for
Linda Tsang.
214 See, e.g., AWEA Br. at 5-9; Consol. Edison Br. at 17-23; Consol. Edison Br. at 17-23; Public Health and Env’tl
Pet’rs Br. at 31-40.
215 See, e.g., States and Muni. Pet’rs Br. at 58-61; Public Health and Env’tl Pet’rs Br. at 27-41; AWEA Br. at 10-14;
Consol. Edison Br. at 17-23. Petitioners also allege that EPA has not reasonably explained its change in position that
the “rebound effect,” in which emission reductions from improved efficiency at coal-fired plants are offset by emission
increases if those plants increase their operations. Public Health and Env’tl Pet’rs Br. at 28-31.
216 EPA Brief at 51-52.
217 Proof Brief for State and Industry Intervenors for Respondent Regarding ACE Rule at 3, Am. Lung Ass’n. v. EPA,
No. 19-1140 (July 16, 2020).
218 See, e.g., States and Muni. Pet’rs Br. at 66-67; Consol. Edison Br. at 23-31. In addition, the Biogenic CO2 Coalition
claims that EPA erred in disqualifying biomass co-firing as a compliance measure for regulated facilities to meet
emissions limits under the ACE rule. See Biogenic CO2 Br. at 7-33.
219 See id.
220 42 U.S.C. § 7416.
221 EPA Brief at 243-44.
222 See, e.g., States and Muni. Pet’rs Br. at 27-28, 69-70; Public Health and Env’tl Pet’rs Br. at 40-44.
223 42 U.S.C. §b7411(d)(1).
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the same category of existing natural gas units.224 In its brief, EPA asserts that Section 111(d) does
not impose a mandatory duty or deadline to promulgate regulations for “any existing source.”225
For further discussion of this issue, see “Q: Why didn’t EPA establish a BSER for other fossilfuel-fired units?”
Petitioning coal and mining companies and industry groups are challenging EPA’s underlying
authority to issue the ACE rule under CAA Section 111(d), echoing issues raised in the CPP
litigation.226 These petitioners claim that EPA failed to make the required endangerment finding
under CAA Section 111 and that EPA can rely on neither previous endangerment findings made in
the 1970s related to SO2, nitrogen dioxide, and particulate matter emissions from steam
generators and combustion turbines nor the endangerment finding made in 2009 in the context of
GHG emission from motor vehicles.227 They also argue that Section 111(d) bars EPA from
regulating CO2 emissions from power plants in any manner because power plants are a source
category regulated under Section 112 for mercury and other HAPs.228
In its response, EPA argues that an endangerment finding is required only when EPA seeks to
regulate new sources under Section 111(b) and that Section 111(d) does not require EPA to make
a separate endangerment finding when regulating existing sources.229 Intervening states,
municipalities, and public health and environmental organizations reiterate the agency’s
argument.230 These groups further assert that EPA made an endangerment finding in its 2015
GHG performance standards for new and modified power plants, which concluded that power
plant CO2 emissions harm public health and welfare and that power plants significantly contribute
to atmospheric CO2.231
Similar to the CPP litigation, the coal and mining industry petitioners are challenging EPA’s
interpretations of the different House and Senate versions of Section 111’s reference to Section
112 exclusion in the 1990 CAA amendments.232 In 1990, Congress replaced and removed the
former HAP listing process in Section 112(b)(1)(A) with a list of nearly 200 HAPs set forth in
Section 112(b).233 In doing so, Section 111(d)’s cross-reference to the deleted Section
112(b)(1)(A) became obsolete. Both the House and the Senate offered different amendments to
address the Section 112 cross-reference that were both passed and signed into law.234 The
provisions amended Section 111(d)(1)(A)(i), which excludes from regulation any air pollutant
that is included on:
224 See, e.g., Public Health and Env’tl Pet’rs Br. at 40-43.
225 EPA Brief at 158-61.
226 See generally Robinson Br.; Coal Indus. Br.
227 See, e.g., Robinson Br. at 20; Coal Indus. Br. at 7-19.
228 See, e.g., Coal Indus. Br. at 20-35.
229 EPA Brief at 163-68.
230 Page-proof Brief for State and Municipal Respondent-Intervenors at 12-24, Am. Lung Ass’n. v. EPA, No. 19-1140
(July 16, 2020); [hereinafter State and Muni. Intervenors’ Br.]; Public Health and Env’tl Intervenors’ Br at 19.
231 See Public Health and Env’tl Intervenors’ Br. at 18-19 (citing 80 Fed. Reg. 64,510, 64,517-24 (Oct. 23, 2015));
State and Muni. Intervenors’ Br. at 19-24.
232 See Section 112 Exclusion discussion in CRS Report R44480, Clean Power Plan: Legal Background and Pending
Litigation in West Virginia v. EPA, by Linda Tsang. See also Coal Indus. Br. at 20-35.
233 42 U.S.C. §7412(b).
234 P.L. 101-549, §§108(g), 302(a) (1990).
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House-originated
amendment
“a list published under section [1]08(a) or emitted from a source
category which is regulated under section [1]12 of this title”235
Senate-originated
amendment
“a list published under section [1]08(a) or [1]12(b)”236
Industry petitioners assert that the House-originated amendment as published in the U.S. Code
superseded the Senate’s “superfluous scrivener’s amendment.”237 Based on the House-originated
provision, they argue that EPA is barred from regulating power plants under Section 111(d) for
CO2 because power plants are a source category regulated under Section 112 for mercury and
other HAPs.238 In both the CPP and the ACE rule, EPA maintains that the Section 112 exclusion
in Section 111(d) “does not bar the regulation of GHGs from power plants notwithstanding that
power plants are regulated for HAP under section 112.”239 The court did not resolve this issue in
the CPP litigation because it dismissed the case as moot after EPA finalized the CPP repeal and
ACE rule.240
Other petitioners representing some industries, trade associations, and think tanks claim that EPA
cannot use its authority under CAA Section 111 to regulate GHGs.241 These petitioners assert that
EPA must establish NAAQS under CAA Sections 108-110 for air pollutants in the “ambient air”
emitted from “numerous or diverse” sources that “endanger” human health or welfare.242 Because
CO2 in the ambient air is emitted by numerous or diverse sources, petitioners claim that EPA
“impermissibly circumvented” the NAAQS procedures by regulating CO2 emissions under
Section 111 without first establishing a NAAQS for CO2.243 In the petitioners’ view, EPA may
establish emission standards under Section 111 only to supplement an established NAAQS.244 In
its brief, EPA contends that it does not have a mandatory obligation to regulate GHGs under the
NAAQS program and is not “bound” to regulate CO2 emissions in a particular manner or order
that the petitioners prefer.245
235 P.L. 101-549, §108(g), 104 Stat. 2399, 2467 (1990), codified at 42 U.S.C. §7411(d)(1)(A)(i) (emphasis added). The
House-originated provision appears in both the U.S. Code and the Statutes at Large. Note that CO2 also is not listed as a
criteria pollutant under CAA Section 108(a).
236 P.L. 101-549, §302(a), 104 Stat. 2399, 2574 (1990) (emphasis added). The Senate-originated provision is included
in the Statutes at Large but not the U.S. Code. EPA has regulated HAPs from power plants under CAA Section 112 as
part of its mercury and air toxics standards. For the status of these standards, see CRS In Focus IF11078, EPA
Reconsiders Benefits of Mercury and Air Toxics Limits, by Kate C. Shouse.
237 See, e.g., Coal Indus. Br. at 20-35.
238 See Coal Indus. Br. at 20-35 (challenging the ACE rule). See also Opening Br. of Petitioners’ on Core Legal Issues
Pet'rs Br. Core Legal Issues at 61-74, West Virginia v. EPA, No. 15-1363 (D.C. Cir. February 19, 2016). Note that CO2
is not listed as a criteria pollutant under a NAAQS under CAA Section 108(a).
239 See EPA, Response to Comments, ACE rule, Chapter 1, Legal Authority, at 10-19 (referencing the preamble to the
CPP for the basis of EPA’s position on this issue, 80 Fed. Reg. 64662, 64710-64715 (Oct. 23, 2015)). See also EPA
Brief at 50-51, 172-90.
240 Order, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Sept. 17, 2019).
241 Robinson Br. at 8-20.
242 42 U.S.C. §§7408-7410.
243 Robinson Br. at 11.
244 Id. at 8-20.
245 EPA Brief at 193-97.
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Q: What is the status of the litigation?
A: On March 23, 2020, the D.C. Circuit issued a revised briefing schedule for the parties.246 All
parties must submit their final briefs by August 13, 2020.247 The court has scheduled the oral
argument for October 8, 2020.
EPA’s Updated Analysis of the CPP Repeal and the
ACE Rule: Emission Impacts, Benefits, and Costs
Q: How did EPA estimate the emission impacts of the final rules repealing the
CPP and promulgating the ACE rule?
A: EPA conducted power sector modeling to estimate emission changes under different scenarios.
Given EPA’s treatment of the CPP repeal and the ACE rule as “separate and distinct” final
actions,248 the agency analyzed the emission impacts from each rulemaking separately. The
sequence of these two final rulemakings had implications for the baseline scenario used to
estimate each policy scenario’s incremental emission impacts.
To analyze the first final rule—the repeal of the CPP—EPA modeled three scenarios of CPP
implementation and compared those emissions projections to a baseline or “reference” scenario
that excluded standards of performance under CAA Section 111(d) for CO2 emissions. The
reference scenario represents “business-as-usual” conditions that “would be expected under the
market and regulatory conditions in the electricity and related sectors in the absence” of the
rule.249 This comparison allowed EPA to estimate the impacts from repealing, and not replacing,
the CPP. The reference and CPP implementation scenarios are as follows:
Reference case: This is a baseline scenario. EPA assumes business-as-usual
market and regulatory conditions in the power sector based on, among other
things, projections from the EIA’s Annual Energy Outlook 2019.
CPP with intrastate trading:250 This scenario assumes that states begin to
implement the 2015 CPP final rule in 2022 by utilizing a mass-based approach
with intrastate trading only. This and the two other CPP scenarios below assume
no incremental demand-side energy efficiency investments and no requirements
for states to address emissions from new sources.
CPP with regional trading and three-year delay: This scenario assumes that
states begin to implement the CPP in 2025 by utilizing a mass-based approach
and regional trading. EPA assumes a three-year CPP compliance delay due to the
rule’s uncertain legal status in the court system, with final goals in 2033 instead
246 Order, Am. Lung Ass’n. v. EPA, No. 19-1140 (D.C. Cir. Mar. 23, 2020).
247 Id.
248 EPA, Regulatory Impact Analysis for the Repeal of the Clean Power Plan, and the Emission Guidelines for
Greenhouse Gas Emissions from Existing Electric Utility Generating Units, June 2019, pp. 1-2, 2-1,
https://www.epa.gov/stationary-sources-air-pollution/regulatory-impact-analysis-repeal-clean-power-plan-and-emission
(hereinafter “Final RIA”).
249 Final RIA, p. 3-4.
250 EPA refers to this scenario as “CPP with Limited Trading” in the Final RIA. See p. 2-36.
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of 2030. Regional trading involves six regions based on existing electricity
interconnections and regional trading systems (e.g., RGGI).
CPP with national trading and three-year delay: This scenario is the same as
the “CPP with regional trading and three-year delay” scenario except that (1) it
assumes national trading instead of regional trading, and (2) EPA excludes
California and the RGGI states from the national trading in this scenario, as these
states have more stringent reduction requirements.
To analyze implementation of the second final rule—the ACE rule—EPA compared projected
emissions from an illustrative ACE rule implementation scenario to a reference scenario that
excluded standards of performance under CAA Section 111(d) for CO2 emissions.251 That is, EPA
analyzed the ACE rule as “a separate action that occurs only after repeal of the CPP.”252 EPA
analyzed a second reference scenario that included changes made by the Bipartisan Budget Act of
2018 (P.L. 115-123) to Internal Revenue Code Section 45Q, which provides a tax credit for
specific CCS activities.253 The illustrative ACE rule implementation scenario modeled application
of HRI at coal-fired EGUs beginning in 2025.254 This scenario assumed that HRI potential and
costs differ based on unit size and efficiency. EPA characterized the analysis as “illustrative,”
because “HRI potential can vary significantly from unit to unit,” and states may consider various
factors when applying the performance standards.255
This ACE rule implementation scenario differed from those analyzed at proposal because EPA did
not finalize the proposed revision to the applicability test for certain power plants under NSR.256
At proposal, two of the three ACE rule scenarios in EPA’s analysis accounted for “benefits from
the proposed revisions to NSR.”257 Details about the scenarios analyzed for the final ACE rule are
presented below.
Reference case: This is a baseline scenario. EPA assumes business-as-usual
market and regulatory conditions in the power sector based on, among other
things, projections from the EIA’s Annual Energy Outlook 2019. In particular,
this scenario does not include implementation of the 2015 CPP final rule.
Reference case with 45Q: This baseline scenario is identical to the above
scenario, but it also includes changes made by the Bipartisan Budget Act of 2018
(P.L. 115-123) to Internal Revenue Code Section 45Q, which provides a tax
credit for specific CCS activities.258 The 2018 act increased the 45Q tax credit
linearly from $22.66 to $50 per ton from 2017 to 2026 for CO2 captured and
251 EPA used the same reference scenario to analyze the final CPP repeal rule and the final ACE rule.
252 Final RIA, p. 1-5.
253 26 U.S.C. §45Q.
254 EPA selected 2025 as “an approximation for when the standards for performance under the final rule might be
implemented.” Final RIA, p. 3-6.
255 Final RIA, p. 1-7.
256 ACE Final Rule, p. 32521.
257 In the two ACE scenarios that accounted for the proposed NSR change, EPA assumed that two additional HRI
technologies—steam turbine upgrade and redesign/replacement of the economizer—would be available to facilities.
For details, see EPA, Regulatory Impact Analysis for the Proposed Emission Guidelines for Greenhouse Gas Emissions
from Existing Electric Utility Generating Units; Revisions to Emission Guideline Implementing Regulations; Revisions
to New Source Review Program, 2018, pp. 1-13 to 1-19, https://www.epa.gov/sites/production/files/2018-08/
documents/utilities_ria_proposed_ace_2018-08.pdf.
258 26 U.S.C. §45Q.
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permanently stored and from $12.83 to $35 per ton over the same period for CO2
captured and used as a tertiary injectant (typically for enhanced oil recovery).259
ACE rule policy scenario: This scenario assumes HRI at coal-fired EGUs. EPA
divided the affected EGUs into 12 groups based on their current generation
capacity (megawatts) and heat rate (British Thermal Units per kilowatt-hour).
EPA assumed that each group would be able to achieve different HRIs: The least
efficient EGUs would make larger HRIs, ranging from 2.8% to 3.2%, the most
efficient EGUs would not make any improvements, and the middle groups would
make HRIs ranging from 0.8% to 2.1%. Based on these ranges, EPA determined
that the average capacity-weighted HRI was 1.5%.260 EPA assumed that the HRI
changes would be made in 2025 and would not change over time.
EPA incorporated “routine data updates” and more current projections into the power sector
modeling for both of the final rules. Among other things, EPA included more current energy
demand projections from the EIA’s Annual Energy Outlook as well as an updated inventory of
state and federal power sector regulations.261
Q: What CO2 emission effects did EPA estimate from the CPP repeal and from
the ACE rulemakings?
A: EPA’s power sector modeling projected modest CO2 emission changes—and in some cases, no
changes in CO2 emissions—under each rulemaking.262 Table 1 presents EPA’s projected emission
levels between 2030 and 2050 for the reference scenario, the three CPP scenarios, and the ACE
rule policy scenario.
EPA modeled three CPP policy scenarios and compared them to a reference scenario. One of the
three CPP scenarios—“CPP with national trading and three-year delay”—projected zero or close
to zero changes in CO2 emissions compared to the reference scenario.263 The other two CPP
scenarios projected some CO2 emissions changes compared to the reference scenario in various
years, ranging from less than one-half percent to about 4% decrease. The “CPP with intrastate
trading” scenario, which assumed that CPP implementation would begin in 2022, projected
greater CO2 reductions compared to the “CPP with regional trading and three-year delay”
scenario. EPA concluded, based on its modeling analysis and its consideration of power sector
trends,264 that repealing the CPP “under current and reasonably projected market conditions and
259 For more details, see CRS In Focus IF11578, CO2 Underground Injection Regulations: Selected Differences for
Enhanced Oil Recovery and Geologic Sequestration, by Angela C. Jones; and CRS Report R44902, Carbon Capture
and Sequestration (CCS) in the United States, by Peter Folger.
260 In the ACE proposed rule, EPA applied uniform HRI percentages to each affected EGU. In the proposed rule,
EPA’s modeling scenarios assumed a fleet-wide HRI of 2% and 4.5% under NSR implementation conditions.
261 EPA’s power sector modeling included AEO 2018. See Final RIA, pp. 3-4 to 3-5.
262 The electric power sector analysis (i.e., modeling results) is available at https://www.epa.gov/airmarkets/analysisfinal-ace-rule.
263 Unrounded estimates range from zero percent change to less than one-half percent change compared to the baseline
in various years.
264 EPA reported that it considered power sector changes, including fuel prices, technology changes and the age of
different portions of the generating fleet, and “recent commitments by many utilities that include long-term CO2
reductions across the EGU fleet.” Final RIA, pp. ES-2, 2-1.
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regulatory implementation is not anticipated to have a meaningful effect on emissions of CO2 or
other pollutants or regulatory compliance costs.”265
EPA’s power sector modeling projected modest emission changes under the ACE rule policy
scenario compared to the reference scenario. As shown in Table 1, the modeling projected that
CO2 emissions would decrease about 1% compared to the reference scenario in 2030 and 2035,
and it projected zero or close to zero change in 2040, 2045, and 2050.266 EPA characterized the
projected CO2 reductions under the ACE rule as “small compared to the recent market-driven
changes that have occurred in the electric sector.”267
Table 1. EPA Projections of CO2 Emissions in the Electric Power Sector
Comparison of EPA Reference and Policy Modeling Scenarios (2030-2050)
EPA Scenario
Projected CO2 Emission Levels
(MMTCO2)
Percentage Change in CO2 Emissions
Compared to Reference Case
2030
2035
2040
2045
2050
2030
2035
2040
2045
2050
Reference case
1,581
1,559
1,604
1,595
1,585
—
—
—
—
—
CPP with
intrastate trading
1,525
1,512
1,553
1,555
1,550
-4%
-3%
-3%
-2%
-2%
CPP with regional
trading and 3-year
delay
1,572
1,550
1,593
1,594
1,585
-1%
-1%
-1%
0%
0%
CPP with national
trading and 3-year
delay
1,581
1,559
1,604
1,595
1,586
0%
0%
0%
0%
0%
ACE policy
scenario
1,571
1,551
1,599
1,596
1,585
-1%
-1%
0%
0%
0%
Source: Prepared by CRS with data from EPA’s power sector analysis for the final ACE rule at
https://www.epa.gov/airmarkets/analysis-final-ace-rule.
Figure 5 illustrates EPA CO2 emission projections in the electric power sector from 2021 to 2050
for each of these scenarios. The top portion of the figure compares the CO2 emission projections
to actual CO2 emissions in the electric power sector between 1990 and 2017. The lower portion
provides a closer look at the differences between the scenarios EPA modeled.
The table and the figure indicate that the emission estimates for the ACE rule policy scenario
closely track the reference case estimates. In 2045, the ACE rule policy emissions are one metric
ton higher than the reference case, which some might argue is evidence of a rebound effect, as
discussed below. See “Q: Would the ACE rule’s HRI lead to potential “rebound effects”?”
265 Final RIA, p. 2-5.
266 Unrounded estimates range from zero percent change to less than one-half percent change compared to the baseline
in various years.
267 EPA, Fact Sheet: Regulatory Impact Analysis for the Affordable Clean Energy Rule (ACE) and Clean Power Plan
Repeal, June 2019, p. 1, https://www.epa.gov/sites/production/files/2019-06/documents/
ace_ria_fact_sheet_6.18.19_final.pdf.
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Figure 5. EPA Projections of CO2 Emissions in the Electric Power Sector
Actual CO2 Emissions and EPA Scenarios
Source: Prepared by CRS with data from EPA’s power sector analysis for the final ACE rule at
https://www.epa.gov/airmarkets/analysis-final-ace-rule. Actual emissions from EPA, Inventory of U.S. Greenhouse
Gas Emissions and Sinks: 1990-2018, April 2020, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gasemissions-and-sinks.
Note: The same EPA scenarios for references cases and CPP and ACE policy scenarios between 2020 and 2050
that are plotted in the top graph are plotted on an expanded scale in the bottom graph to provide a more
detailed view.
EPA points out that its emission projections contain uncertainty. In addition to the factors
identified by EPA that provide uncertainty for all the scenarios—electricity demand, natural gas
supply and demand, and long-term planning by utilities—the agency describes “considerable
uncertainty” that is particular to its ACE rule policy scenario. In its Regulatory Impact Analysis of
the final rule, EPA states that “there is inadequate and incomplete information regarding how
states might specifically implement this rule, and the estimated range of costs and impacts
presented in this chapter is based on the assumptions.”268
268 Final RIA, pp. 3-29.
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Q: How do the CO2 emission projections in the final ACE rule compare with
prior EPA CO2 emission projections?
A: Comparing EPA’s emission projections in the 2019 final ACE rule with projections from the
2015 final CPP rule is challenging for several reasons. First, the CO2 emission baseline conditions
in the electric power sector changed between 2015 and 2019 (e.g., see the changes in the
electricity generation profile in Figure 2 above). These changes impact the stringency of
emission reduction programs. For example, in 2015, EPA estimated that the CPP would reduce
CO2 emissions from the electric power sector by 32% in 2030 from 2005 levels compared to a
reference case scenario prepared for the CPP rule. In its 2019 final ACE rule, EPA estimated that
its reference case scenario (without the CPP) would reduce CO2 emissions from the electric
power sector by 34% in 2030 from 2005 levels.269
As illustrated in Figure 6, EPA’s reference case scenarios have changed over the past four years.
The different reference case scenarios are a result of the recent decreases in CO2 emissions in the
electric power sector (as discussed above). As the figure indicates, emissions decreased by 15%
between 2014 and 2017. Therefore, when EPA promulgated the CPP in 2015, the rule appeared
more stringent (compared to its 2015 baseline) than it does today, because many of the emission
reductions that would have been required by the CPP have already occurred. As previously noted,
several factors likely played a role in recent power sector emission changes, including
technological advances in energy production (e.g., hydraulic fracturing) and federal and state
policies, including federal tax policies270 and states’ renewable portfolio standards.271 For more
information, see “Q: How much does the generation of electricity contribute to total U.S. GHG
emissions?”
269 CRS identified one study that used EPA’s modeling framework to estimate emissions under the CPP repeal and
ACE final rule. The authors estimated emissions reductions using an “updated version of the CPP,” which included
revised assumptions regarding renewable energy use, national trading, energy efficiency improvements, and
mechanisms to address emissions from new sources. See Kathy Fallon Lambert et al., Carbon Standards Re-Examined:
An Analysis of Potential Emissions Outcomes for the Affordable Clean Energy Rule and the Clean Power Plan, July
17, 2019, https://cdn1.sph.harvard.edu/wp-content/uploads/sites/2343/2019/07/Carbon-Standards-ReExamined_Final1.pdf.
270 See CRS Report R44852, The Value of Energy Tax Incentives for Different Types of Energy Resources, by Molly F.
Sherlock.
271 See, for example, Database of State Incentives for Renewables and Efficiency, Map of Renewable Portfolio
Standard Policies, as of October 2018, http://ncsolarcen-prod.s3.amazonaws.com/wp-content/uploads/2018/10/
Renewable-Portfolio-Standards-2018.pdf.
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Figure 6. Comparison of EPA Reference Case Scenarios
Source: Prepared by CRS with data from EPA’s power sector analysis for the final ACE rule at
https://www.epa.gov/airmarkets/analysis-final-ace-rule; and data from analysis for the CPP final rule.
Some observers have noted that the underlying assumptions in the CPP scenarios modeled by
EPA in 2015 differ from the assumptions in the CPP scenarios the agency modeled in 2019.272 For
example, in its 2015 CPP final rule analysis, EPA assumed that CPP implementation would result
in energy efficiency improvements.273 This assumption effectively lowered the demand for
electricity generation and therefore emissions from electricity.274 EPA does not include energy
efficiency assumptions in its 2019 analysis. In addition, in EPA’s 2015 final rule analysis, the
relevant CPP scenario included a mechanism to account for potential emissions from new
generation sources.275 The CPP scenarios considered in the 2019 analysis do not have this
requirement. As highlighted above, in its 2019 analysis EPA assumed a three-year implementation
in two of the CPP scenarios compared to the assumed start date considered in the 2015 CPP
272 Lambert et al., Carbon Standards Re-Examined; and Arjun Krishnaswami, “EPA’s Monkey Business Hides ACE
Rule Emissions Increase,” Natural Resources Defense Council, June 2019, https://www.nrdc.org/experts/arjunkrishnaswami/epas-monkey-business-hides-ace-rule-emissions-increases.
273 EPA defined demand-side energy efficiency measures as an “extensive array of technologies, practices and measures
that are applied throughout all sectors of the economy to reduce energy demand while providing the same, or better,
level and quality of service” (EPA, Demand-Side Energy Efficiency Technical Support, August 2015,
https://www.regulations.gov/document?D=EPA-HQ-OAR-2017-0355-0048). Examples include utilities offering
technical services such as audits and retrofit, installation of more efficient products and equipment in residential or
commercial buildings, or undertaking home energy audits leading to customized whole home retrofits.
274 EPA did not model specific energy efficiency measures in the 2015 CPP Regulatory Impact Analysis (RIA) but
rather assumed that demand-side energy efficiency efforts would reduce electricity demand by approximately 8%
compared to a business-as-usual scenario. EPA based this estimate on its review of historical state programs and the
literature. See EPA, Regulatory Impact Analysis for the Clean Power Plan Final Rule, Table 3-2, October 23, 2015,
https://www.regulations.gov/document?D=EPA-HQ-OAR-2013-0602-37105 (hereinafter “2015 CPP RIA”); and EPA,
Demand-Side Energy Efficiency Technical Support.
275 EPA included this mechanism (described as a “new source complement”) to account for the requirement that states
using a mass-based target approach must address the potential for emissions leakage in their state plans. For more
details see CRS Report R44341, EPA’s Clean Power Plan for Existing Power Plants: Frequently Asked Questions, by
James E. McCarthy et al.
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analysis. All else being equal, the impacts of these different assumptions in the 2019 modeled
CPP scenarios likely diminish the potential emission reductions of the 2015 CPP.
Q: What non-CO2 emission effects did EPA estimate from the CPP repeal and
ACE rulemakings?
A: EPA’s power sector modeling also projected changes in non-CO2 emissions under each
rulemaking. Specifically, the modeling analysis projected changes in emissions of SO2, NOx, and
HAPs, including mercury. While these pollutants have implications for air quality and public
health,276 they are not directly targeted by the CPP (or CPP repeal) or the ACE rule. Table 2
presents EPA’s projected non-CO2 emission levels for 2030, 2035, and 2040 for the reference
scenario; the three CPP scenarios; and the ACE rule policy scenario. Table 3 presents the
emission changes as a percentage.
EPA’s power sector modeling projected modest changes nationally in non-CO2 pollutants under
most scenarios compared to the reference scenario. Across the CPP policy scenarios and the ACE
rule policy scenario, the “CPP with intrastate trading” scenario showed the highest emission
changes compared to the reference scenario. The remaining two CPP scenarios and the ACE rule
scenario generally projected emission changes less than 1% from the baseline at the national
level.
EPA’s modeling analysis of the ACE rule “projects both decreased and increased levels of [fine
particulate matter] and ozone, depending on the location,” compared to the reference scenario.277
Some stakeholders raised concerns that regional increases in non-CO2 pollutants would “make it
harder for some areas” to meet existing federal air quality standards.278 EPA responded that the
updated modeling for the final ACE rule projected nationwide decreases compared to the
reference scenario. EPA also discussed its consideration of rebound effects. For more details
about projected changes in non-CO2 emissions at a sub-national level, see “Q: Would the ACE
rule’s HRI lead to potential “rebound effects”?”
Table 2. EPA Projected Non-CO2 Emissions in the Electric Power Sector
Comparison of EPA Reference and Modeling Scenarios (2030-2040)
Projected SO2 Emission
Levels
(thousand metric tons SO2)
Projected NOx Emission
Levels
(thousand metric tons NOx)
Projected Hg Emission
Levels
(metric tons Hg)
2030
2035
2040
2030
2035
2040
2030
2035
2040
Reference
case
803
741
736
735
683
673
4.0
3.7
3.7
CPP with
intrastate
trading
774
698
707
691
646
633
3.9
3.5
3.6
EPA
Scenario
276 For example, SO
2 and NOx are criteria pollutants regulated under the CAA that directly affect air quality. SO 2 and
NOx are also “precursor emissions” that contribute to the formation of particulate matter and ozone, which are likewise
regulated under the CAA.
277 Final RIA, p. 4-8.
278 ACE RTC, see chap. 7, p. 6.
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Projected SO2 Emission
Levels
(thousand metric tons SO2)
Projected NOx Emission
Levels
(thousand metric tons NOx)
Projected Hg Emission
Levels
(metric tons Hg)
EPA
Scenario
2030
2035
2040
2030
2035
2040
2030
2035
2040
CPP with
regional
trading and
3-year delay
797
733
725
729
678
667
4.0
3.6
3.7
CPP with
national
trading and
3-year delay
805
740
737
735
683
673
4.0
3.7
3.7
ACE policy
scenario
798
735
733
728
678
670
4.0
3.6
3.7
Source: Prepared by CRS with data from EPA’s power sector analysis for the final ACE rule at
https://www.epa.gov/airmarkets/analysis-final-ace-rule.
Notes: NOx based on estimated annual NOx emissions.
Table 3. EPA Projected Changes in Non-CO2 Emissions in the Electric Power Sector
Comparison of EPA Reference and Modeling Scenarios (2030-2040)
Projected SO2 Emission
L
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