McCarthy hints at interim target changes in power plant rule 

Source: Jean Chemnick, E&E reporter • Posted: Wednesday, February 18, 2015

U.S. EPA Administrator Gina McCarthy suggested today that EPA would change the way early reductions are mandated in its final version of the Clean Power Plan.

In an appearance at the National Association of Regulatory Utility Commissioners (NARUC) winter meeting, McCarthy acknowledged many states have told EPA that the interim compliance period would limit their options or affect reliability.

“I think that the comments that we received showed a lot of real concern that there were a few states where the combination of the interim target and the aggressiveness of that, and the goal that we wanted to achieve to provide ultimate flexibility to the states — there was a lot of concern that those collided in a few states,” she said.

The proposal EPA released last June tasked some states with achieving the bulk of their overall emissions reduction targets beginning in 2020 — well in advance of the final 2030 phase-in date.

Those targets are front-loaded mostly because of the assumptions EPA’s draft makes about how quickly states can switch their current generation mix from coal to natural gas. But McCarthy noted EPA released a notice of data availability last fall asking for comment about some tweaks to those assumptions, which would soften interim requirements for some states.

While McCarthy seemed to hold the door open for changes to the interim state targets, she said the final rule would need to mandate some pre-2030 action.

“We clearly need to make sure that there’s a trajectory toward a goal that is as far away as 2030,” she said.

McCarthy noted that most states have not said their final goal is unachievable, a fact she held out as a hopeful sign.

NARUC and many other commenters also have told EPA they are concerned that states might not be credited appropriately for actions they took to reduce emissions before the interim targets phase in by 2020. McCarthy pointed to a $4 billion proposed fund included in the fiscal 2016 budget request to Congress, which would provide assistance to states that reduce power sector emissions ahead of schedule or in excess of what they are required to do under the rule.

The proposal would require congressional appropriations, however, which are unlikely to clear a GOP-controlled Congress.

McCarthy also told the regulators that EPA is consulting with other federal agencies that have more jurisdiction over reliability and technology — especially the Federal Energy Regulatory Commission. The rule’s critics have urged FERC to exercise vigorous oversight over the rule, which they say will force key power plants to retire prematurely.

But McCarthy said EPA and FERC developed a working relationship during the rulemaking and implementation processes for EPA’s mercury power plant rule and that they continue to consult on the Clean Power Plan.

And McCarthy said again that EPA will release its final Clean Power Plan by “midsummer,” refusing to offer a more concrete timeline.

“I will not squander the opportunity to get it done right because I’ve talked about a specific date,” she said.

In remarks earlier in the morning at the same event, Energy Secretary Ernest Moniz said the Obama administration’s efforts to contain emissions had made a difference in the global conversation on climate change ahead of this year’s crucial round of United Nations negotiations.

“What we see generally in conversations with other partners internationally is the conversation has changed,” he said.

Work done in 2014, including the release of the Clean Power Plan, has paved the way for a more ambitious deal to be struck in Paris, he said.

“I think many of us would not have found us in at least such a position for potentially a major impact in the Paris meeting,” she said.

Moniz said DOE’s second comprehensive review of the nation’s science and energy technology research and development programs — known as the Quadrennial Energy Review — would be released in the next weeks.

It will include recommendations that can only move forward with authorization by Congress, he said.

“More broadly with infrastructure, the need to get out there and do the kinds of changes we need in energy infrastructure … those almost uniformly will require some action by Congress,” Moniz said.

He added that DOE staff are talking to key members on Capitol Hill in hopes of paving the way for infrastructure legislation.

“Indeed when we started the QER, one of the motivations was that a strongly and analytically founded document could provide the basis of discussion with both chambers and both parties,” he said.