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EPA Power Plant Climate Change Rules

Regulatory

The combination of recent Clean Air Act rules and low natural gas prices is leading to retirement of over 300 coal-fired power plants, accounting for roughly 90 gigawatts of coal-fired generation, by 2020.

That shift would offer a boon to natural gas. Switching from coal-fired generation to natural gas-fired generation is the predominant compliance strategy as implementation begins, with renewables playing a growing role in the mid-2020s and beyond.

The recent repudiation of EPA’s mercury and air toxics rule for power plants is not expected to slow the retirements of coal fired power plants in the U.S.

Legislative

On June 24th more than a dozen House Republicans spoke against the EPA’s power plant rule, saying it amounts to a massive power grab that is illegal and unconstitutional and that lawmakers are obligated to protect states and citizens from it.  The House was debating the Ratepayer Protection Act, H.R. 2042, introduced by Representative Ed Whitfield of Kentucky (67 bipartisan cosponsors) which would let state governors opt out of the rule if they determine that compliance would raise electricity rates, hurt economic sectors or harm power reliability.  The Senate is working on a similar measure that would repeal the rule, delay its implementation, make it much harder for the EPA to regulate power plants’ carbon emissions, and give state governors more reasons they could reject compliance for a future rule.  The Administration has pledged to veto the bill if both Houses of Congress pass it.

The House Interior-EPA appropriations bill also contains a provision prohibiting the use of funds to propose, finalize, implement or enforce any regulation or guidance under Section 111(b) of the Clean Air Act establishing any standard of performance for emissions of any greenhouse gas from any modified or reconstructed source that is a fossil fuel-fired electric utility generating unit or that applies to the emission of any greenhouse gas by an existing source that is a fossil fuel-fired electric utility generating unit.

On June 9th, the U.S. Court of Appeals for the District of Columbia dismissed a lawsuit by the nation’s largest coal companies and 14-coal producing states that sought to block the EPA power plant proposal.  The court ruled it was premature to consider the proposed rule, citing long-standing precedents holding that only final agency actions are reviewable.

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