EPA might tweak Clean Power Plan’s short-term targets — McCabe 

Source: Jean Chemnick, E&E reporter • Posted: Wednesday, January 7, 2015

U.S. EPA’s air chief appeared to hint today that her agency might include language in its final version of the Clean Power Plan that would soften state carbon reduction responsibilities in the short term.

In a post on EPA’s blog this afternoon, Assistant Administrator for Air and Radiation Janet McCabe hit back at criticisms that the June 2 draft rule would be costly and affect grid reliability by citing her agency’s release in October of a document asking for comment on whether to loosen the proposal’s interim state targets.

The original proposal for existing power plant greenhouse gas emissions sets targets for states beginning in 2020, which would be averaged through 2029. The rule phases in completely in 2030, but many states are required to achieve the bulk of their reductions on average beginning in 2020.

This near-term requirement has been panned as the rule’s “regulatory cliff” by many, including some states and companies that are not often critical of EPA.

In today’s post, McCabe points to stakeholder discussions that have occurred since the proposal was introduced, “including suggestions that the agency consider certain changes to the timing of the plan’s compliance period so that the program could better succeed in affording states and utilities the intended flexibility.”

October’s notice of data availability (NODA) features “ways to ensure that states and utilities could develop their own ‘glide paths’ for complying with their emissions reductions obligations while managing costs and further addressing reliability needs,” McCabe writes.

The NODA asks for comment on a variety of tweaks, including one that would adjust the draft’s assumption about how quickly existing power plants with combined-cycle natural gas technology can ramp up to 70 percent capacity and displace coal-based power (Greenwire, Oct. 30, 2014). The draft assumes that can occur by 2020 — and that assumption is the reason targets for many states are frontloaded.

But states and the utility industry have argued it would be impossible to build the needed infrastructure to allow for fuel switching by 2020 — which is 18 months after some states may be required to submit their implementation plans for the rule to EPA.

Jeff Holmstead, a former EPA air chief who now represents clients at Bracewell & Giuliani, said he was not surprised to see McCabe tout the possible change of near-term targets.

The post “just confirms that the final rule will allow emission reductions to be phased in more gradually,” he said. “The big question now is whether states will be given flexibility to design their own glide paths or whether EPA will keep some kind of interim targets in the early years.”

Industry groups and some states have pressed EPA to scrap pre-2030 targets altogether in favor of less binding ways of showing early progress.

McCabe wrote as a new Congress begins with both sides of Capitol Hill now in Republican control. The Clean Power Plan is expected to be a prime target for the newly united GOP majority. The House Energy and Commerce Committee in December released a report signaling its intent to exercise oversight on the rule (E&E Daily, Dec. 17, 2014).

“It seems like the deeper we dig into this proposal, the more problems we uncover,” Chairman Fred Upton (R-Mich.) said in a statement in December. “While EPA’s legal authority remains in question, the consequences for consumers and our economy are certain — higher prices, fewer jobs, and reduced reliability.”

But McCabe said the draft rule already included numerous provisions aimed at protecting grid reliability, including the fact that the interim target would be averaged over a period of 10 years.

“System operators, states and utilities will have the time to do what they are already doing — looking ahead to spot the potential changes and contingencies that pose reliability risks and identify the actions needed to mitigate those risks,” she wrote.