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Clean Power Plan to spur new compliance efforts in power industry

Readers may have heard that President Obama released some of the details of his Clean Power Plan earlier this week. The plan, which was first proposed by the Environmental Protection Agency last year, has the purpose of setting national standards limiting carbon pollution connected to power plants, which are the largest source of emissions.

Prior to the Clean Power Plan, power plants had no limits on carbon emissions. The Clean Power Plan requires power plants to cut carbon dioxide emissions 32 percent from 2005 levels by the year 2030. That is obviously a tall order, and one which will be a challenge for many plants, even given the flexibility built into the plan. 

By flexibility is meant the fact that the Clean Power Plan allows states to choose how to meet carbon reduction standards. The plan, for example, allows states to develop compliance plans making use of emission credit trading and demand-side energy efficiency strategies, as well as other strategies of their choosing. Compliance with the plan will undoubtedly force states and energy companies to be creative, though compliance averaging will not begin until 2022 and reduction of emissions are going to be gradually phased in through 2030.

One of the principles of the plan is that emissions standards for each power sector are designed differently for each state, such that Georgia’s targets will be different than those of other states. Compliance, then, will be very specific for each state.

No doubt, it will take time for the power industry to begin engaging with the plan and to mobilize resources for compliance. Along the way, guidance will be necessary to ensure that companies are meeting their goals and that they are doing so in the most efficient way possible, and legal counsel will undoubtedly be helpful in compliance efforts. 

Sources:

Usnews.com, “Clean Power Plan: Your State-by-State Greenhouse Gas Emissions,” Alan Neuhauser, Aug. 3, 2015.

Whitehouse.gov, “Fact Sheet: President Obama to Announce Historic Carbon Pollution Standards for Power Plants,” August 3, 2015. 

 

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