Last week, EPA Acting Administrator Andrew Wheeler unveiled the Affordable Clean Energy (ACE) rule intended to replace the recently repealed Clean Power Plan (CPP) finalized during the Obama Administration. The ACE rule is the EPA’s strategy to address electric power sector carbon dioxide (CO2) emissions.
The proposed rule requires Kentucky to create its own plan to address CO2 emissions from its coal-fired power plants across the Commonwealth. The EPA is proposing a list of “candidate technologies” that states can apply to specific power plant units in order to improve the efficiency of the unit which will reduce CO2.
States will have three years to develop their plans and the EPA will have one year to review and approve the plans, which Wheeler said will give more decision-making authority to the states.
In a sit-down interview with The Bottom Line, Acting Administrator Wheeler said the Clean Power Plan represented government telling states what power should be used and requiring shifts in the economy by relying on shutdowns, reduced usage of existing plants, and other requirements he feels are outside the scope of the EPA.
“We took a look at the Clean Air Act, took a look at the Supreme Court decision [on the Clean Power Plan], and we’ve put forward a plan that we believe follows the laws Congress has given us and is going to allow for energy efficiency on a plant by plant basis instead of just coming in and dictating that a third of the coal-fired power plants are going to close,” Wheeler said.
Though the EPA can’t predict exactly how the state’s will respond with their plans, several scenarios estimated by the EPA demonstrate a reduction of CO2 and under some scenarios a compliance cost savings of $6.4 billion from switching from the CPP to the Affordable Clean Energy rule.
Wheeler told The Bottom Line the Clean Power Plan would have resulted in double-digit price increases in more than 40 states which would have negatively impacted low-income Americans with increased electricity costs. The new EPA Administrator said individuals making less than $50,000 a year pay 25% of their income per year on electricity costs on average, which is why he feels it is important to keep energy costs low.
“What a lot of people, particularly in Washington D.C., fail to remember is that when you increase energy prices it hurts poor Americans, it hurts people on a fixed income, it hurts senior citizens, it hurts the competitiveness of businesses,” Wheeler said. “When businesses decide where they want to locate, they take a look at the energy costs. So, they don’t only take a look at the energy costs on a state-by-state basis on deciding which state to locate, but they also take a look at the country’s electricity prices and the stability and price of electricity in the United States as opposed to maybe Canada or Mexico or other countries. So, the price of electricity factors into people’s day to day lives and it also factors into their jobs.”
The goal of the Clean Power Plan was to lower CO2 emissions and clean up many energy sources to ensure less pollution.
Wheeler stated that from 2005-2017, the United States has already reduced emissions by 14% while the rest of the world’s emissions increased by 20%. He also said the air in the United States is 71% cleaner than it was in the 1970s and the EPA will continue to enforce regulations that ensure the protection of the health of American citizens.
Though finalized by the Obama Administration, the Clean Power Plan was not the law of the land. It had been stayed by the Supreme Court of the United States. The Kentucky Chamber along with 166 other business associations across the U.S. called on the courts to the stay the rule based on lack of legal authority and excessive compliance costs. The CPP was viewed by many to exceed the legal authority of the Clean Air Act.
During his visit to Kentucky to speak about the rule, Wheeler also explained the EPA’s proposal to modify the new source review analysis for power plants being upgraded in response to the ACE rule. He also indicated that changes to the Waters of the U.S. definition would be proposed in the next month or so. And Wheeler said that the EPA will now act on all permits within 6 month and will work to resolve enforcement actions in a timely manner—within a calendar year.