Clean Power Plan Repeal Update. Air Quality Technical Advisory Committee December 14, 2017

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1 Clean Power Plan Repeal Update Air Quality Technical Advisory Committee December 14, 2017 Tom Wolf, Governor Patrick McDonnell, Secretary

2 The Clean Power Plan On October 23, 2015, EPA issued a rule to reduce CO2 emissions from new fossil fuel-fired power plants known as New Source Performance Standards. On that same day, EPA issued a rule to reduce CO2 emissions from existing fossil fuel-fired power plants known as the Clean Power Plan ( CPP ). Performance standards for new and existing sources must reflect the best system of emission reduction or BSER. While the term standard of performance is defined under Section 111(a) of the CAA, 42 U.S.C. 7411(a)(1), its constituent term BSER is not defined under the CAA and is open to legal interpretation. 2

3 The Clean Power Plan The term standard of performance means a standard for emissions of air pollutants which reflects the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated. 3

4 The Clean Power Plan Under the CPP, EPA interpreted BSER broadly. Under this rule, BSER for CO2 emissions from existing sources was a combination of three building blocks : Improving heat rate at all fossil fuel-fired sources; Substituting increased generation from lower-emitting natural gas combined cycle sources for decreased generation from higher-emitting oil and coal-fired sources; and Substituting increased generation from zero-emitting renewable energy generating capacity for decreased generation from all fossil fuel-fired generating units. 4

5 The Clean Power Plan In essence: Building Block 1 requires reductions at the source level by improving heat rates at individual units, which is referred to as inside the fence line reductions. Building Blocks 2 and 3 require generation substitution on behalf of a source at another location, which is referred to as outside the fence line reductions. 5

6 The Clean Power Plan Repeal On October 16, 2017, EPA published a notice in the Federal Register proposing to repeal the CPP. Specifically, EPA proposes a change in the legal interpretation of BSER as applied to Section 111(d) of the CAA on which the CPP is based. EPA proposes a narrow legal interpretation of the term BSER as being limited to emission reduction measures that can only be applied to or at an individual stationary source. 6

7 The Clean Power Plan Repeal That is, such measures must be based on a physical or operational change to a building, structure, facility, or installation at that source, rather than measures that the source s owner or operator can implement on behalf of the source at another location. This means that Building Blocks 2 and 3, which substitute electricity production to other sources, would not be permissible under this proposed legal interpretation. All reductions would need to take place at the source itself, like Building Block 1. 7

8 The Clean Power Plan Repeal The EPA is proposing to repeal the CPP in its entirety. The agency proposes to take this action because it believes that the rule, or Building Blocks 2 and 3, under the CPP, exceeds its authority under the CAA and that those portions of the rule which arguably do not exceed its authority, like Building Block 1, are not severable and separately implementable. 8

9 The Clean Power Plan Repeal EPA identifies five specific reasons for the proposed change in its legal interpretation: The proposed narrow interpretation more closely matches the statutory language. The legislative history is indicative of source-specific application. Prior agency practice was to apply BSER at the individual source level. The proposed interpretation harmonizes with other provisions of the CAA where technology standards are applied at the source level only. The CPP is more of an energy regulation than environmental regulation because of its generation-shifting focus. 9

10 The Clean Power Plan Repeal The proposed rule does not propose a replacement rule that EPA believes is within the scope of its authority. However, EPA is considering the scope of such a rule and is intending to issue an Advance Notice of Proposed Rulemaking ( ANPRM ) in the near future. That ANPRM will solicit information on systems of emission reduction that are in accord with the narrow legal interpretation proposed in this notice. 10

11 Conclusion EPA is requesting comment on this proposed legal interpretation, which ends on Jan. 16, Public Hearings were held in Charleston, WV, on Nov. 28 and 29, DEP is in the process of developing comments on the proposal. 11

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