Abby L. Harvey
GHG Monitor
8/7/2015
As states begin to wade through the final version of the Environmental Protection Agency’s carbon emissions standards for existing coal-fired power plants, announced early this week, initial reactions range from cautious optimism to stark disappointment. The rule, dubbed the “Clean Power Plan,” requires states to develop action plans to meet federally set emissions reduction targets. Several states saw significant shifts in the stringency of their targets as proposed compared to those in the final rule.
Among these states is North Dakota, where the target was increased in stringency more than 324 percent, from an 11 percent reduction in the proposal to a 45 percent reduction goal in the final rule. Under this new target, it will be “very difficult for the state to address the plan and come into compliance,” Dave Glatt, section chief for the North Dakota Environmental Health Department, told GHG Monitor this week.
On the other end of the spectrum, several states appear to be well on the way to meeting or exceeding their targets in the final Clean Power Plan. According to EPA, California, Delaware, Idaho, Maine, Massachusetts, Nevada, New Hampshire, New York, Oregon, South Dakota, Virginia and Washington will exceed their Clean Power Plan targets if they remain on their current trajectories.
Several changes were made in the final version of the rule. The timeline was delayed by two years, giving states extra time to develop and implement plans. An early action incentive program was added for states that work to reduce emissions before the new start date of 2022. A “reliability safety valve” also now gives states additional flexibility if electric reliability issues are found. Demand-side energy efficiency was removed from the “best system of emissions reductions,” and state targets were adjusted to reflect a greater estimation of renewable power coming online, among other variables.
North Dakota had been informed that its target would likely change, Glatt said, though he would have liked to know the actual number before the rule’s finalization. “EPA gave us a warning that the numbers would be adjusted but not to the extent that they eventually were, and we’re a little disappointed that when they’re making that large of an increase … that they should have given the states another chance at least to look at it and get a comment back from them. That really is a game changer for us from where we were planning to go,” Glatt said.
States Call for a Stay
In an Aug. 5 application sent to EPA Administrator Gina McCarthy, 16 states called on the administration to grant an administrative stay on the rule “pending completion of the impending litigation regarding the Rule’s legality.” If the rule is not stayed, the states argued, significant funds could be expended that, if the rule is found to be illegal, would not be recoverable.
“Absent a stay, the States would need to prepare their State Plans immediately because of the date certain submission deadline of September 6, 2016, and limited extension period. The character and enormous scope of the obligations that the Section 111(d) Rule imposes upon the States is far beyond anything the States have ever experienced under the Clean Air Act, or any other federal rule. … These economic and sovereign harms will be entirely irreparable if the courts ultimately declare that the Section 111(d) Rule is invalid, and will impose substantial, irreparable harms upon the States,” according to the document, signed by attorneys general from Alabama, Arizona, Arkansas, Indiana, Kansas, Kentucky, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Utah, West Virginia, Wisconsin, and Wyoming.
While North Dakota did not join the call for a stay, it agrees with the premise as it mirrors the state’s current situation. As with many states, North Dakota had begun the initial steps of developing a state implementation plan (SIP) for emissions reductions based on its target in the proposed rule. But with the new target, it’s back to the drawing board.
“We were in conversation with various players and talking to stakeholders, and quite frankly the information we were getting back is they weren’t pleased with the other initial proposal,” Glatt said. “But there was a feeling that there was a chance to come in compliance with that.” After seeing the final target, he added, pessimism about the state’s ability to meet the target abounds and the work that had been done is essentially useless.
The state does not want to go back to the drawing board a third time, Glatt said. “I’m hopeful that they stay the thing just because we started putting a whole lot of work into it, and they pulled the rug out from under us with this change. The same thing could happen once you go to court where if they modify or have to change certain parts of the rule. You’d hate to have to put a lot of time and effort into it and find that you have to start over again.”
Regardless, North Dakota intends to attempt to develop a SIP for compliance with the rule. “I think we are going to put together a plan,” Glatt said. “Now, whether or not it’s approvable by EPA, we’ll have to see, but we’re going to take a look at what we can do.”
Final Rule Drops Two States
Missing from the final rule are emissions targets for Alaska and Hawaii, which were included in the proposal. This is because of the states’ unique situations, unconnected from the electric grid in the contiguous states. Vermont also lacks a target, though the state was left out of the proposal as well because it has no coal-fired power plants. Guam and Puerto Rico are also given no target in the rule.
The lack of a target for Alaska and Hawaii doesn’t mean the states are off the hook, EPA acting Assistant Administrator for the Office of Air and Radiation Janet McCabe told reporters this week. “I wouldn’t use the word ‘exempt.’ I would use the word ‘defer.’ What we found was that we don’t feel we have the kind of data and information we need to establish final goals for Alaska, Hawaii, Guam, and Puerto Rico at this time,” McCabe said. “We intend to work with those jurisdictions and other sources to get information and move forward to finalize a plan. We do not set out a schedule for that at this time, but we will move forward with that.”
Following the release of the proposed rule in June 2014, Alaska requested an exemption from the Clean Power Plan, though did not know until the final rule was released if the request had been granted, Denise Koch, director of the Alaska Department of Environmental Conservation, told GHG Monitor this week.
Unlike North Dakota, Alaska chose not to begin developing a SIP prior to the rule’s finalization. “Alaska requested an exemption from the rule but wasn’t clear how the state’s unique circumstances would be addressed by EPA in the final rule. We therefore felt that it was premature, especially in a time of limited resources, to work on a State Implementation Plan prior to the issuance of the final Clean Power Plan,” Koch said.
The state’s exclusion from the plan called into question what its involvement might be with other states regarding the rule. “Alaska had been a party to multistate litigation on the proposed rule. The Alaska Department of Law is currently evaluating the state’s position in light of the final Clean Power Plan rule,” Koch said.
Hawaii stands ready to work with the EPA to develop a compliance plan, Mark Glick, Hawaii State Energy Office administrator, told GHG Monitor in an e-mail this week. “The EPA has reached out to us, and we are prepared to provide the Agency with whatever assistance [it] needs,” Glick said. Alaska has also been contacted by EPA with a request for further information to aid in the eventual development of a target for the state, according to Koch.
Rule Provides Ease in Developing Market-Based Compliance
While some states have said meeting the emissions reductions targets will be difficult, 11 are on track to exceed the goals set forth by EPA based on programs already in place, according EPA projections. Five of these states – Delaware, Maine, Massachusetts, New Hampshire, and New York – are members of the Regional Greenhouse Gas Initiative, a northeastern carbon trading program.
The RGGI states themselves have expressed cautious optimism in making that determination, however. “We’re still very much reading and digesting the details of the rule like everyone else,” Katie Dykes, deputy commissioner for energy with the Connecticut Department of Energy and Environmental Protection and chair of the RGGI Board of Directors, told GHG Monitor this week.
The rule does allow for market-based and multi-state approaches like that used in the RGGI program. Given the market-based form that the proposed federal implementation plan and model state plan, also released this week, have taken, EPA has taken much of the initial legwork out of setting up such a program, Dykes said. “I think that the framework that EPA is putting forward would save states a lot of the time in the sort of early development of our program as far as being able to opt into a multi-state mass-based trading program,” she added, also noting that other states can learn from RGGI’s experience setting up such a program.
The proposed FIP offers a mass- or rate-based trading system and would be put into place in states which do not submit a SIP. The proposed FIP also includes a model state plan, giving states a possible framework to work off of when developing their own plans.
