The Clean Power Plan – Following a Consistent Approach to Setting State Goals

The Clean Power Plan – following a consistent approach to setting state goals
EPA’s proposed Clean Power Plan is continuing to get plenty of attention and lots of good questions. That’s great because it means people are digging into the proposal to see how it works.  We have heard a number of questions about the proposed state goals – and rightly so.  The proposed state goals are fundamental to how the program will cut pollution, so it’s important that you understand how we developed them, why they are different from state to state, and how states can meet them.  So let me provide a little more information.

How did EPA calculate the state goals?
As I mentioned last week, the Clean Power Plan works by setting state goals that gradually reduce each state’s carbon intensity rate, or “pollution-to-power ratio.” To do that, the state goals are determined by using a formula that takes the amount of CO2 emitted and divides it by the megawatt-hours of electricity generated (lbs/MWh). This is what we call a rate-based approach. Many other Clean Air Act rules have used emissions rates in the past to reduce other pollutants from power plants and many other types of facilities.

To set state-specific goals, EPA looked at all the great work that states, cities, and utilities are already doing to lower carbon pollution from the power sector. We gathered publicly available data for each state, from 2012, which is the most current information available. This included CO2 emissions from each state’s current fossil fuel power plants, information about renewables and energy efficiency policies, and data about how power is generated and moved around the electricity system.

That gave us a starting point for each state.  From 2012, EPA looked ahead to what could reasonably be accomplished by 2030 across the power sector if states made practical and affordable changes to generate electricity without emitting as much CO2.  EPA took the energy information and emissions data for each state and plugged it into the formula.  EPA applied the formula in the same way for all the states covered by the program. So while the expectations for what the sector can do are based on a national assessment of what is achievable, the outcome – or goal – for each state is unique because each state has a different energy mix and different programs and policies in place.  This is a fair and equitable approach because the formula is applied uniformly.

Specifically, we started with each state’s 2012 CO2 emissions rate (lbs/MWh) and then looked at four strategies that are in widespread use in the energy sector:

  1. First, coal power fleets can become more efficient, which will reduce total state CO2 emissions, dropping the state’s emission rate.
  2. Second, states can use their natural gas power plants more often because those plants don’t emit as much carbon pollution. This lowers total state CO2 emissions and increases clean generation, reducing the state’s emission rate further.
  3. Third, states can increase renewable energy sources such as wind and solar and sustain their nuclear power generation. These zero- and low-carbon emitting sources lower CO2 emissions and increase clean generation, dropping the state’s emission rate even further.
  4. Fourth, states can expand energy efficiency programs so a state’s residents and businesses use less electricity. In the formula this counts as an increase in clean generation, dropping the state’s emission rate to a final number.
  5. This final number is the state goal.

Why are state goals so different?
State goals are different because states produce and consume electricity differently and because some states have invested in natural gas, renewables and energy efficiency more than others. When we take these unique circumstances into account, each state’s ability to improve its CO2 emission rate differs from other states. This doesn’t necessarily mean that it’s easier for one state or more difficult for another. It just means that each state’s goal reflects its potential to reduce pollution from its own, unique starting point.  Our energy system is complex, and there are a number of available, practical, effective and affordable options for states to choose. The main points are that every state has a role to play, and each state has room for improvement.

Many states have already made commitments for the coming years that will put them on track to meet their state goals. In fact, many states have made significant progress since 2012 by adding new renewable energy to their fleet last year; taking older, high carbon-emitting sources offline; and shifting energy production to newer, lower carbon-emitting power plants.

What do states have to do to meet their goals?
It’s also important to remember that state goals do not define or limit how states meet their goals. Each state has a huge amount of flexibility to figure out how to do that. In meeting the goal a state can use all, some, or even none of the strategies EPA used to calculate the goal. Also, a state can choose to achieve its goal alone or in collaboration with other states. In other words, each state has the flexibility to figure out how to meet its goal in any way that meets its needs as long as the state can demonstrate how its plan will get to the goal and achieve real reductions in carbon pollution.

Tell us what you think
We look forward to hearing more of your questions and getting your feedback on the Clean Power Plan. We have a lot of great information about the rule on our website: Check it out, let us know what you think, and keep the discussion going!