Written by Josh Siegel | June 19, 2019 12:00 AM | Updated Jun 19, 2019, 10:23 AM
The Trump administration finalized Wednesday its much-anticipated rule gutting President Barack Obama’s signature plan for reducing carbon emissions from coal plants to combat climate change. The Environmental Protection Agency released its replacement of Obama’s Clean Power Plan with a modest rule intended to encourage efficiency upgrades at coal plants to help them exist longer and emit less pollution.
“ACE will continue our nation’s environmental progress and will do so legally and with respect for the states,” EPA Administrator Andrew Wheeler said at a press conference Wednesday, where he was joined by White House Chief of Staff Mick Mulvaney, other administration officials, and Republican members of Congress from coal states. “The ACE rule will incentivize new technologies so coal plants can be part of our energy future.”
The Trump administration plan, known as the Affordable Clean Energy or ACE rule, encourages states to allow utilities to make heat rate improvements in power plants, enabling them to run more efficiently by burning less coal to produce the same amount of electricity. Under current rules, power plants must undergo new pollution reviews when they upgrade facilities, making it prohibitively expensive.
The rule is not projected to meaningfully reduce emissions, and is expected to have little effect on the actions of electric utilities that are already switching away from expensive coal to cheaper natural gas and renewables without a federal regulation.
The focus on regulating power plants individually is a rejection of the Clean Power Plan, which allowed for efficiency upgrades, but also sought to push the overall power sector to switch away from coal to natural gas and renewables.
The Clean Power Plan required states to reduce carbon dioxide emissions 32% below 2005 levels by 2030.
The Trump administration rule, unlike the Clean Power Plan, does not set a specific target for the power sector to reduce carbon emissions, giving states the authority to write their own plans for reducing pollution at individual plants.
In choosing to replace the Clean Power Plan, rather than repeal it outright, the EPA is acknowledging the federal government is legally obligated to regulate carbon emissions that cause climate change. Environmentalists and Democratic states, however, plan to sue the Trump administration, arguing the rule does not meaningfully fulfill the bare-bones requirement of the Clean Air Act since it would not significantly cut carbon emissions by keeping alive coal plants with efficiency improvements that would otherwise retire.
Carbon emissions rose in 2018 for the first time in eight years.
“What a responsible administration would do is strengthen the Clean Power Plan, not kill it,” said David Doniger, senior strategic director of the Climate and Clean Energy Program at the Natural Resources Defense Council, which will be among the groups suing the EPA. “We will attack this because it attempts to cripple the Clean Air Act as a tool to tackle climate change.”
Courts never ruled on the legality of the Obama administration’s Clean Power Plan — even though the Supreme Court stayed the rule.
Trump’s EPA, and conservative state attorneys general who filed suit, argued that Obama’s approach was expansive and illegal.
The relevant section of the Clean Air Act, section 111(D), says carbon pollution regulations must reflect “the best system of emission reduction” — without defining what that means. The Trump administration, critics say, is seeking to have the federal courts enshrine its narrow view of law.
“They are looking to define the limits of EPA’s regulatory authority,” said Jeff Holmstead, a former deputy administrator of the EPA in the George W. Bush administration and energy industry attorney who agrees with the Trump administration’s approach. “The ACE rule can establish what EPA can do when it comes to regulating emissions from the power sector.”
EPA says the new rule will reduce carbon emissions by as much as 35% below 2005 levels in 2030 — similar to projections for the Clean Power Plan — but most of that would occur from market forces absent any regulation. EPA, in a fact sheet accompanying the rule, projects ACE will cut carbon emissions 11 million tons by 2030, but that’s only about a 0.84% reduction compared to what would occur with no regulation.
A senior EPA official, briefing reporters Wednesday, acknowledged some coal plants will increase emissions over their lifetime if they apply efficiency improvements and operate longer, rather than retire.
“It will yield virtually no reductions in C02 emissions,” said Joseph Goffman, an environmental law professor at Harvard University who was a chief architect of the Clean Power Plan, speaking on a phone call with reporters. The EPA is looking to “simply be a grudging cheerleader for what the utility sector is doing anyway, not for climate change reasons, but simply for business reasons,” he added.
Large utilities that are transitioning off coal have said EPA’s effort to encourage efficiency upgrades at coal plants will not inspire them to alter plans to switch to cleaner energy.
“We are on our path. We are going to stay on our path,” Dominion CEO Thomas Farrell told the Washington Examiner this month at a utility industry conference.
Coal has fallen from 55% of power produced by Dominion to 11%, he said, helping the company stay on track for its goal of reducing emissions 50% by 2030 and 80% by 2050.
Ohio-based American Electric Power, one of the nation’s largest utilities, has similar views on the Trump pitch, even though it opposed the Clean Power Plan. It aims to reduce coal use from nearly half its electricity mix to 27% by 2030, while cutting its carbon emissions 80% by 2050.
“AEP’s long-term strategy remains focused on modernizing the power grid, expanding renewable energy resources and delivering cost-effective, reliable energy to our customers,” Tammy Ridout, an AEP spokeswoman, told the Washington Examiner.
Indeed, many coal plants across the industry are too old to make upgrades worth investing in. Others have already done the efficiency work EPA outlines in its proposal, utility industry analysts say.
Trump EPA’s coal plan could be most beneficial for smaller utilities, like co-ops that provide energy to rural consumers. These utilities aim to keep rates as low as possible because many of their users are low-income, and it would cost less to upgrade an existing coal plant than to invest in a new facility.
“The final ACE rule gives electric cooperatives the ability to adopt evolving technology and respond to market and consumer demands while continuing to serve as engines of economic development for one in eight Americans,” said Jim Matheson, CEO of the National Rural Electric Cooperative, a trade group representing more than 900 co-ops in 47 states.