Implications of EPA Emissions Rules for Renewables

Renewable energy will play a major role in EPA’s latest proposal to cut greenhouse gas emissions from electric generating facilities.   On June 2, 2014, EPA Administrator Gina McCarthy proposed a new regulation for cutting carbon pollution from existing electric generating units (EGUs).  This rule is perhaps the most significant action to date in the President’s Climate Action Plan announced last year.  The rule will require EGUs to reduce their CO2 emissions by 30% by 2030 from 2005 levels.   EPA assigned a CO2 goal for each state but lets states choose how best to meet the goal.  

One of the options that states may use is to expand renewable energy generation capacity – e.g., wind, hydroelectric and solar.   In its proposal, EPA noted that “renewable electricity generation is a proven way to assure reductions of CO2 emissions at affected EGUs at a reasonable cost.”

Each state will have a rate goal setting the “future carbon intensity of that state” by 2020. States are required to meet a “Best System of Emission Reduction” that is based on four standards of current activity to reduce CO2 emissions.

In addition to expanding renewable energy, the other “building blocks” of the plans are:

  • Making fossil fuel power plants more efficient
  • Using low-emitting power sources more frequently
  • Using electricity more efficiently

States will have until June 2016 (with a possible extension to 2018) to file their plan describing how they will meet their CO2 goals and the role that renewable energy will play.   EPA will hold four public hearings and accept public comments on the proposal for 120 days after publication in the Federal Register.  Congressional hearings will also take place in the coming weeks.  Administrator McCarthy will be invited to testify along with various stakeholder groups.

The Firm’s Public Policy group is monitoring the rulemaking closely.  We are happy to assist any interested parties with questions or drafting comments for submission to EPA in the rulemaking process.

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