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Understanding State Goals under the Clean Power Plan

2014 June 4
Janet McCabe

June 4, 2014
2:54 pm EDT

The Clean Power Plan is about getting all the power we need, with less of what we don’t need: pollution.  Many people are now looking more closely at the plan and want to know a little more about how it all works, especially about what role their state will play in reducing carbon pollution.

Because the agency is looking for well-informed comments and input on the proposed plan, I wanted to explain a few key aspects of the proposal.  By answering a few questions such as – 1) what’s the baseline? 2) how is EPA using the Clean Air Act? 3) how can the power sector cut carbon pollution?  4) how did EPA set goals for each state? and 5) what flexibilities do states have? – I hope you’ll come away with a better understanding of the Clean Power Plan and how it will achieve significant air pollution reductions. As more questions come up, we’ll use this space and to answer them.  Now, on to the questions!

What baseline did EPA use to determine how much pollution must be reduced?

EPA did not set a baseline. Remember, the plan is about generating the power we need, but with less pollution.  So instead of setting a baseline, the Clean Power Plan works by setting state goals to reduce the “pollution-to-power ratio” of the covered fossil-fuel fired power plants in a given state.  EPA projects that by 2030, when states meet these goals, the U.S. power sector will emit 30 percent less carbon pollution than it did in 2005.  But 2005 – or any other year – is not used as a “baseline” year for a fixed percentage of reductions.  We are using that statistic only because people need to know how much pollution we’ll reduce by when and compared to what, so we’re just comparing where we will be in 2030 to where we were in 2005.

How does the Clean Air Act work to cut carbon pollution from existing power plants?

EPA is proposing carbon pollution guidelines using section 111(d) of the Clean Air Act.  Basically, this part of the law requires EPA to identify the best and cheapest ways to reduce pollution from a given source – in this case, power plants that burn fossil fuels.   The key to reducing carbon pollution from the power sector is to generate and use power more efficiently.  Put another way, the goal is to reduce the carbon pollution emitted for each megawatt-hour of electricity generated. That provides power with less pollution. The amount of carbon pollution per megawatt-hour produced is called an emission rate.  It is the rate at which pollution is emitted per unit of power generated.  If a source emits a lot of carbon dioxide but produces relatively little energy, then its “carbon intensity” is considered high. Using section 111(d) of the Clean Air Act, EPA is proposing that states develop plans to reduce the carbon intensity of the power sector.  The goal is not to limit the amount of power we produce.  It’s about reducing the overall amount of carbon pollution from power plants, while still producing the energy we  need.

How can the power sector reduce carbon emissions?

EPA found that there are a wide variety of commercially available, technically feasible, and cost-effective ways that states, cities and businesses across the country are already using to reduce carbon pollution from the power sector.  EPA identified four measures–that are the commonly used, technically sound,  affordable, and that result in significant reductions in carbon intensity.  They are – 1) improving efficiency at existing coal-fired power plants, 2)increasing utilization of existing natural gas fired power plants, 3) expanding the use of wind, solar, or other low- or zero-emitting alternatives, and 4) increasing energy efficiency in homes and businesses. By applying some or all of these measures a state can reduce the carbon intensity of its power system.  These aren’t the only approaches that states can use, but EPA determined that—taken together—they are the best system of emission reduction, as that term is defined in the Clean Air Act.

How did EPA set goals for each state?

By looking at the mix of power sources and the ability of each state to take advantage of any of the four carbon pollution reduction measures, the EPA calculated goals for each state. The proposed state goals are based on a consistent national formula and calculated using specific information about the state or its region’s individual power profile.  The result of the equation is the state goal.  Each state goal is a rate – a pollution-to-power ratio – for the future carbon intensity of covered existing fossil-fuel-fired power plants in a given state.  States can meet their goal using any measures that make sense to them—they do not have to use all the measures EPA identified, and they can use other approaches that will work to bring down that carbon intensity rate.  I hope this explanation makes clear that EPA is not setting goals based on percentage reductions against a baseline year. But when states meet their goals in 2030, EPA projects that the increased efficiency and reduced carbon intensity will result in a 30 percent less carbon pollution when compared with 2005 levels.

How do the state goals give states flexibility?

EPA has set a goal for each state based on an analysis of the best system of reductions, based on estimates of the potential in each state for efficiency improvements and increased utilization of cleaner generation.  Once the state has a goal, however, it is free to meet that goal in the way that works best for that state.  It can rely more or less heavily on specific measures such as efficiency or renewable energy, or even pursue others such as increases in transmission efficiency or new gas generation.  The state can also choose the policy or portfolio of policies that works best to achieve the goal.

Learn more about the Clean Power Plan

The Clean Air Act and the state planning process offer enough time and flexibility for every state to cut wasted energy, improve efficiency, and reduce pollution – while still having all the reliable and affordable power we need to grow our economy and maintain our competitive edge. In the coming months, we’ll be seeking comments and feedback on the proposed Clean Power Plan, and I encourage you to learn more and join the discussion:

Editor's Note: The views expressed here are intended to explain EPA policy. They do not change anyone's rights or obligations.

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19 Responses leave one →
  1. Shannon Reed permalink
    June 5, 2014

    What happens if a state does not meet their goals?

    • Julie Meyer permalink
      June 17, 2014

      A federal plan will be implemented in lieu of a state plan

  2. Caroline Petti permalink
    June 6, 2014

    Do the proposed emissions goals apply to federal fossil-fuel powerplants (e.g., TVA,etc.)?

  3. William Wallace permalink
    June 6, 2014

    There is no instance of “nuclear” mentioned as a zero-emitting alternative. It should be put on the table, and would mitigate concerns about relying upon solar and wind, which depend on weather.

    In short, there is a commercially available off-the-shelf (COTS) alternative just in case a plan B is needed.

    • Carl Childers permalink
      June 7, 2014

      Nuclear IS mentioned elsewhere in the accompanying EPA documents, as one means of accomplishing the needed emissions reductions. I have only started to read the information on this site minutes ago, so I don’t know how nuclear generation is quantitatively treated. It seems that it’s not discouraged, though.

    • Julie Meyer permalink
      June 17, 2014

      It’s mentioned in Block 3 of the state goal computation, but there is a simpler way to think about it. Emissions estimates are divided by total generation. If generation increases but emissions stay the same, your emission rate will go down. Since nuclear is a low/zero-emitting source, adding more capacity or increasing generation will lower emission rates and help the state achieve their goal.

  4. Raj permalink
    June 6, 2014

    Few Talking Points:
    -What is the cost associated with reducing carbon pollution per mega-watt hour as per the Clean Power Plan?
    – Will the Utility rates increase as a result and passed on to the consumers?
    -Is this mandatory for all the States to be on board with the Clean Power Plan? What if the States refuse to buy into the plan?
    – Is the federal government providing any funds or subsidy to the States to off-set the cost that the State may incur as result of implementing the plan?
    -How is EPA going to assure the States it would not affect the economy of the respective States?
    – Are the National/State Association of Utilities and Electric Coops onboard with the plan? What are there specific issues and how is that being addressed?
    – The succes of climate change depends on addressing issues comprehensivly at all fronts. Is the Federal Government likely to address the fuel efficiency of the automotive industry later?
    -What economic impact would the States have whose economy depends upon the coal and the mining industry? How is the Federal Goverment likely to address the concerns of those States?

  5. Tom Butz permalink
    June 6, 2014

    I don’t understand why the state goals are not expressed in tons/year. Expressing the goals in tons/MWh is confusing because it doesn’t accurately show the amount of impact from the change of dispatch of the system. I don’t believe the 4-6% efficiency improvements is something that is feasible.

  6. Steve Barney permalink
    June 7, 2014

    What is the “consistent national formula” which was used to calulate each of the proposed state GHG emissions goals?

  7. Z FARIDI permalink
    June 9, 2014

    A: What is correct from following?
    1. In 2030, total amount of Carbon emission will be 30% less than 2005 level
    2. In 2030, Carbon intensity will be 30% less than 2005 levels.

    B: Will the installation of new coal fired power plants be allowed from now onward?

  8. Ted McGovern permalink
    June 11, 2014

    Recent court decisions have gone EPA’s way with the judges refusing to question the “science” behind EPA rule-makings and EPA’s procedure for setting these goals is the result. Consider the bait and switch approach for describing the expected reductions that claim a 30% reduction from 2005. That sounds good but everyone associated with regulatory analysis immediately assumed that meant that the baseline for determining how the program would determine reductions would also be 2005.

    Oh no, this blog says ”EPA is not setting goals based on percentage reductions against a baseline year”. Instead, “the proposed state goals are based on a consistent national formula and calculated using specific information about the state or its region’s individual power profile”.

    Hopefully even the courts will call out EPA on this charade. Even a formula has input data and whatever you call it the choice of that input data makes a difference. If you put in 2005 data, then the results will be different than using the 2012 data.

    In the past EPA has used multi-year periods to establish the data used in their formula aka the baseline, but given free rein to do whatever by the courts they took the easy way out. Their rationale for 2012 was that it “represented the most recent year for which complete data were available at the time of the analysis.” Forget that they used unpublished data on a unit level rather than facility level like the rest of the EGRID data set. Forget using an average over a multiyear period because they “determined that there would be little variation in results compared to a 2012 base year data set due to the rate-based nature of the goal.” They took the easy way out and just did the analysis for one year.

    The fact of the matter is that there are significant differences between 2005 and 2012. Most notably by the natural gas revolution that created an economic advantage for natural gas over coal and changed the CO2 emissions profile. One should expect that state-level RPS and EE/EC programs would have also changed the generation mix between 2005 and 2012. Finally the States in RGGI had a program in place to change their CO2 emissions profile that would change these parameters.

  9. Martha Phillips permalink
    June 17, 2014

    I am trying to understand the pros and cons of the two options. Option One has higher deployment of the four “building blocks” with a 2030 deadline. Option Two has lower deployment of the four bldg blks and a 2025 deadline. States have different goals depending on which option they choose to use.

    So what are the arguments for and against Options One and Two? How would states/regions view them? Which is most desirable (according to what criteria)? Seems like Option One would reduce CO2 emissions more than Option Two.

    Has anyone written about this?

  10. Kimberly Jones, NCUC Staff permalink
    June 18, 2014

    Are power plants that burn wood covered by the proposed regulations? If not, could a state plan include the burning of additional wood to make electricity?

    • Daniel Blake permalink
      August 21, 2014

      This is addressed on p. 34924 of the Proposed Rules. “As a result, broadly speaking, burning biomass-derived fuels for energy recovery can yield climate benefits as compared to burning conventional fossil fuels.”

  11. Jim Pierobon permalink
    August 1, 2014

    Where can I find the % emissions reductions called for in Virginia? NRDC says 38% by 2030 from 2012.

    • Anonymous permalink
      August 8, 2014

      In the EPA spreadsheet 20140602tsd-state-goal-data-computation.xls the Virginia unadjusted 2012 state fossil fuel rate is 1,438 and the final goal is 810. That represents a 43.7% reduction. Hopefully that helps.

  12. Paul Wood permalink
    August 5, 2014

    I have to agree with at least 1 comment that is asking if this is looking for a TOTAL reduction in carbon or a reduction in the amount of carbon/MWH. I don’t see how energy efficiency helps for the latter.

  13. Paul Harris permalink
    March 19, 2015

    Why are we waiting so long to evaluate progress, why not an every Five(5) year or less reduction progress evaluation in that way the EPA can make reccomendations on reduction methods and determine if the state is on track or target and if not assist r take over that states mission!

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