On June 2, 2014, the United States Environmental Protection Agency (EPA) issued a proposed rule pursuant to Section 111(d) of the Clean Air Act regarding emission guidelines for states to follow in developing plans to address greenhouse gas emissions from existing fossil fuel-fired electric generating units. EPA estimates that nationwide, by 2030, this rule would achieve carbon emission reductions of approximately 30 percent, as measured from 2005 levels. The crux of EPA’s proposal is state-specific targets for carbon reduction. EPA has structured each state’s goal in two parts: a state must meet an interim goal on average over the ten-year period from 2020-2029 and a final goal by 2030 and thereafter.

The emission guidelines for states are based on EPA’s determinations of the "best system of emission reduction." EPA proposes that a mix of four "building blocks" comprise the best system of emission reduction: making fossil fuel power plants more efficient (e.g., by increasing heat rates); making more use of lower-emitting carbon sources (e.g., natural gas combined cycle units); using more zero and low-emitting carbon sources (e.g., nuclear and renewables); and using electricity more efficiently (e.g., demand-side energy efficiency).

Each state would be required to determine, and include in its state plan, emission performance levels for its affected plants. States are also offered the option to choose between a regional (i.e., multiple states) or a single state compliance approach. All states must submit initial or complete plans by June 30, 2016, with the potential for a one-year extension for individual state plans and a two-year extension for multi-state plans. Comments on the Proposed Rule are due 120 days from the date of publication in the Federal Register. The Proposed Rule can be accessed here.

For more information, please contact Jeff Genzer, Eli Eilbott, Sean Neal, or Natalie Karas.