EPA's Clean Power Plan: Implementation Options

Abstract

On June 2, 2014, the U.S. Environmental Protection Agency (EPA) proposed a plan to reduce carbon dioxide (CO₂) emissions from existing fossil fuel power plants based on its authority under section 111(d) of the Clean Air Act (42 U.S.C. § 7411(d)). The proposal, known as the Clean Power Plan or 111(d) rule, will require each state to develop a plan for reducing the rate of CO₂ emissions from its electric power system. As currently proposed, the Clean Power Plan requires states to meet interim emissions reduction targets beginning in 2020, with final targets to be achieved by 2030. The Clean Power Plan envisages that electric power companies will reduce their emissions by, among other things, switching to lower carbon fuel sources and increasing investment in energy efficiency. Currently, coal supplies approximately 40 percent of the electricity delivered to the grid in the U.S. Reducing the carbon intensity of the electric power system will mean increased reliance on natural gas and alternative sources of power, such as nuclear, wind, and solar. To some extent, this transition is already underway, even in the absence of federal standards. The U.S. Energy Information Administration estimates that, between 2004 and 2014, coal-fired electricity generation declined by nearly 20 percent. Over the same period, natural gas-fired generation increased by almost 58 percent and non-hydroelectric renewable generation by over 200 percent. The Clean Power Plan promises to accelerate this transition away from coal towards natural gas and renewables. Given this, the Clean Power Plan has been highly controversial. EPA received approximately two million public comments from states, industry leaders, environmental groups, and public citizens with a wide range of opinions on the best options to proceed with the Clean Power Plan. To help inform the on-going policy debate, from April to June 2015, the Kay Bailey Hutchison Center for Energy, Law, and Business at The University of Texas at Austin conducted a survey on key aspects of the Clean Power Plan. 66 valid survey responses were received. The survey respondents included power company executives, industry consultants, state environmental officials, state energy officials, utility regulator staff, and regional transmission organization staff from various locations. Responses were not collected from every state. Survey respondents were not asked whether they support or oppose the Clean Power Plan. Rather, the survey focused on issues relating to implementation of the Plan. The survey results are summarized in this report.