Final Clean Power Plan: Coming Soon to a State Near You...

 Summer in the Front Range has brought frequent off-season cool temperatures and heavy rains.  As many wonder whether this is extraordinary, or merely the new normal, the Environmental Protection Agency (EPA) continues to plod away on finalizing Carbon Pollution Standards for Existing Power Plants, known generally as the Clean Power Plan.  EPA proposed a draft Clean Power Plan last June pursuant to its authority under Section 111(d) of the Clean Air Act (CAA), and following a U.S. Supreme Court decision that confirmed EPA’s right to regulate greenhouse gases as a pollutant that could endanger human health and the environment (Massachusetts v. EPA, 549 U.S. 497 (2007)).  EPA has indicated it will issue a final rule mid-summer. 

            The proposed Clean Power Plan sets state-specific carbon standards for existing fossil fuel-fired power plants.  For some in the power industry, as well as states like Wyoming that profit from carbon-intensive oil and gas operations, such regulation constitutes a major economic threat.  Yet to many environmentalists, policy-makers, and public health advocates, the new rule provides hope for a safer and more biodiverse world.  As discussed in the proposed rule, climate change caused by greenhouse gas emissions threatens public health in multiple ways – higher temperatures and associated heat mortality, more extreme weather events, rising sea levels, food security issues, to name a few. 

            Further, to many innovators and entrepreneurs, the new rule promises ample opportunities.  In the proposed Clean Power Plan, EPA strongly suggests four “building blocks” for states to achieve their carbon emission standards: 

  1. Making existing units more efficient by improving heat rates;
  2. Substituting more carbon-intensive units (coal) with less carbon-intensive units (combined-cycle gas plants);
  3. Substituting carbon-intensive generation for renewable generation; and
  4. Reducing overall emissions with demand-side energy efficiency measures.

            Although states have flexibility to achieve reductions by 2030 in any way they see fit, the standards themselves were calculated based on EPA’s analysis of each state’s potential in these four areas.  Each of these building blocks requires new technologies and programs, as well as the expansion of existing technologies and programs. 

            The call for additional demand-side (DSM) energy efficiency measures greatly benefits the energy efficiency business community here in Boulder, in the state of Colorado, and in states across the nation.  Currently, over 40 states have established some form of DSM energy efficiency.  Strategies include:  energy efficiency resource standards, resource planning requirements, and/or demand-side management plans for investor-owned utilities, electric cooperatives, and/or municipal utilities; building energy codes and tracking programs; state appliance codes; and tax credits.  Dietze and Davis participates in the DSM Plans of investor-owned utilities, as vetted in the Colorado Public Utilities Commission.  Opportunities exist for growth in this sector in the areas of building, HVAC, insulation, lighting, consulting services, behavioral products, and many others.  In Colorado, new carbon emission standards has the potential to promote additional energy efficiency programs and products in several ways:  (1) to expand existing investor-owned utility DSM programs; (2) to promote growth of electric and municipal cooperative DSM measures, which to this point have not been mandatory; and (3) to allow Colorado DSM to continue on a strong path forward as means to assist neighbor states in meeting overall emission goals through interstate emission plans. 

            The DSM energy efficiency industry, along with most sectors of the economy, policy-makers, and environmental advocates, eagerly await release of the final rule.  Once state-specific standards are confirmed, states will have a limited period of time to produce state emission plans and demonstrate the plans’ ability to meet EPA goals.  Opportunities should exist for public and industry participation in the state planning processes.  We will be sure to post an update when it issues.  More information on the rulemaking is available HERE.