United States: Stringency And Flexibility – Two Sides Of The Same Coin In EPA's Proposed Greenhouse Gas Emissions Regulations For Existing Power Plants

Last Updated: August 5 2014
Article by Mark Perlis

EPA's ground-breaking proposal to cut carbon dioxide (CO2) emissions from existing power plants has been lauded by some for affording states considerable flexibility, while also being criticized by others for being stringent.  In fact, it's both.

Flexibility is provided in the proposed regulations by permitting emission reductions to be achieved within four "building block" policies.  EPA would allow a state implementation plan to count CO2emission reductions that occur as a result of (i) improving heat rate efficiency at coal-fired power plants; (ii) changing the dispatch of power plants so that existing combined-cycle natural gas plants are run more intensively and existing coal plants are run less intensively; (iii) expanding renewable generation and preserving existing nuclear plants at risk of retirement; and (iv) reducing end-use demand for electricity through adoption of energy efficiency programs.

These "building-blocks," enable each state to design a least-cost system of CO2 emission reductions that best fits the electricity sector profile of the state.  Additional flexibility is afforded states through optional use of (i) regional implementation plans, (ii) mass-based rather than rate-based emission standards, (iii) cap and trade systems, (iv) assumption of state responsibility FOR achieving some part of the emission reductions, (v) alternative timelines and goals for submitting implementation plans and for achieving emission limits, and (vi) retention of and reliance on existing state programs.

But, the flexibility of the four "building blocks" has a flip side.  EPA uses the feasibility of implementing each building block as the basis for establishing the "stringency" of the CO2 emission performance standards imposed on each state.  EPA euphemistically refers to the state emission performance standards as "goals," but these standards are binding.  Moreover, the standards are calculated by EPA using a uniform formula that presumes the feasibility and cumulative impact of policies and measures within each building block within each state.This is the inflexible aspect of EPA's "building blocks."

In this blog post, we briefly summarize EPA's factual and policy determinations that underlie inputs to its formula for calculating the stringency of each state's binding CO2 emission performance standards, which are established for the year 2030 and, on average, for the decade of 2020-2029.  EPA invites comment on its formula and its input assumptions and determinations.  The formula used to calculate the binding CO2 performance standard for each of the fifty states is specified and illustrated in the  Goal Computation Technical Support Document.

  1. Improving power plant efficiency.  EPA determines that every existing coal-fired power plant could improve its heat rate by at least 6%, yielding a 6% reduction in each plant's net CO2 emission rate.  EPA finds that this level of average heat rate improvements could be achieved, at reasonable cost, through equipment upgrades and adoption of best operating practices.  EPA also assumes no installation of carbon capture and sequestration technologies at existing power plants and no conversion or co-firing of existing coal-fired power plants with natural gas.
  2. Redispatch from coal to natural gas.  EPA determines that each natural gas combined-cycle ("NGCC") plant could achieve a 70% utilization rate (i.e., capacity factor), and be substituted for coal and less efficient natural gas and oil generation.  EPA assumes that this implied increase in the national average NGCC capacity factor from 46% in 2012 to 70% in 2020 (capped only by limits on how much natural gas could be substituted for other fossil generation in a particular state) could be achieved in a regional power pool or individual utility system utilizing security-constrained, economic dispatch, if a carbon price (estimated to be $30 per metric ton of CO2) or operating limits were imposed on existing coal-fired power plants.  However, EPA also notes that while it assumes a 70% average capacity factor for application of its formula, it does not expect that the majority of states would operate their existing power plant fleet at this level of redispatch.  See Goal Computation Technical Support Document at n.13.
  3. Renewables and nuclear power plants.  EPA assumes that, after giving effect to announced retirements of several nuclear plants, approximately 6% of the historical nuclear fleet is at risk of early retirement, primarily due to unfavorable economics.  In setting each state's CO2 emission performance standard, EPA assumes retention of at-risk nuclear plants and completion of planned new construction of nuclear facilities.

    EPA also assumes annual increases in renewable generation in each state, based on annual growth factors and maximum target percentages that EPA determined for six regions encompassing the continental U.S.  The regional targets are based on the average Renewable Portfolio Standard requirements in those states within the region that have adopted such requirements.  EPA does not differentiate among different renewable technologies, but it proposes to exclude hydropower from its calculations.
  4. Reductions in electricity demand.  EPA developed a "best practices" demand-side energy efficiency scenario, which provides an estimate of the potential reduction in electricity demand that can be achieved at reasonable cost through demand-side measures already achieved or mandated by a number of states.  EPA calculates that twelve leading states have achieved or will achieve at least a 1.5% annual reduction in electricity demand through these best practices for end-use energy efficiency.  EPA applies this 1.5% annual incremental end-use energy efficiency savings factor to determine levels of CO2 emission reductions associated with foregone electricity generation achievable in every state (each of which starts from a different baseline).

The foregoing electricity sector policies and measures – the "building blocks" – comprise the "best system of emission reductions," under Section 111(d) of the Clean Air Act, for which EPA calculates, using its uniform formula, the stringency of binding CO2 emission performance standards imposed on each state.  Starting from this prescriptive, inflexible stringency, EPA's proposed Section 111(d) regulations attempt to afford states considerable flexibility in developing their individual or regional implementation plans, which must be approved by EPA.  Future blog posts will examine other aspects of EPA's proposed regulations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions