As part of a continuing effort to address climate change, the United States Environmental Protection Agency ("EPA") has released a revised proposed rule seeking to significantly reduce carbon dioxide ("CO2") emissions from all new coal- and natural gas-fired power plants. The proposed rule, announced by EPA on September 20, 2013, would establish the first uniform national limits on the amount of carbon-based emissions from new power plants.
EPA's proposal replaces an earlier 2012 proposal to regulate CO2 emissions from electric generating units under the Clean Air Act. As now proposed, EPA is establishing separate New Source Performance Standards for coal- and natural gas-fired electric generating units. Initially, EPA sought a single standard for new generating units, regardless of whether the units used coal or natural gas to operate.
Under EPA's revised draft rule, new coal-fired units would need to meet a limit of either 1,100 pounds of CO2 per megawatt-hour over a 12-month rolling average operating period or between 1,000 and 1,050 pounds of CO2 per megawatt-hour based on an 84-month rolling average operating period. With respect to either standard, new coal-fired units would be required to install "partial" carbon capture and sequestration technology ("CCS"), an emerging technology, as the best system of emission reduction to lower CO2 emissions. By requiring partial CCS technology, EPA estimates that new coal-fired units would emit approximately 30 to 50 percent less CO2 than a coal-fired unit without CCS technology.
With respect to new natural gas-fired units, larger units with a capacity of at least 850 million Btu's per hour ("mm/Btu/h") would need to meet a limit of 1,000 pounds of CO2 per megawatt-hour, while smaller units with a capacity of less than 850 mm/Btu/h would be subject to an emissions limit of 1,100 pounds of CO2 per megawatt-hour. According to EPA, the most common type of fossil fuel-fired units being planned or built is natural gas-fired with combined cycle technology, which EPA concludes "is an inherently lower CO2-emitting technology" than a typical new coal-fired plant of the same size. EPA asserts that no additional emissions control technology will likely be required for new natural gas-fired units to meet either limit.
The proposal to regulate carbon dioxide from new power plants is EPA's first major initiative since President Obama announced his Climate Action Plan this past June (http://www.whitehouse.gov/sites/default/files/image/president27sclimateactionplan.pdf). EPA plans to follow its proposed rule on new power plants with a far-reaching one seeking to establish CO2 performance standards for existing coal and gas-fired units. In a presidential memorandum dated June 25, 2013 (http://www.whitehouse.gov/the-press-office/2013/06/25/presidential-memorandum-power-sector-carbon-pollution-standards), President Obama directed EPA to issue proposed carbon pollution standards for modified, reconstructed and existing power plants by June 1, 2014, and to finalize such standards by June 1, 2015.
EPA is accepting comments on the proposed rule setting CO2 emission standards for new power plants for 60 days following publication in the Federal Register. EPA will hold hearings on the proposed rule and has indicated that it plans to issue a final rule within the next year. This final rule is expected to face a court challenge.
Day Pitney Alert
Flossie Davis, Thomas Havens and Jennifer Galiette wrote an article, "NY Retail Electricity Order Vacated — For Now," for Law360. The article is about the recent decision by the Supreme Court for the County of Albany, New York, to vacate key directives of the New York Public Service Commission (PSC) in its "Order Resetting Retail Energy Markets and Establishing Further Process" issued on Feb. 23, also known as the PSC reset order.
Day Pitney Alert
Jennifer Galiette wrote an article, "State Strategy to Focus on Energy, Building Processes and Transportation," for The Connecticut Law Tribune. The article is about the Connecticut Department of Energy and Environmental Protection's (DEEP) announcement in May that it is beginning to develop a new statewide Comprehensive Energy Strategy (CES) for Connecticut.
On July 12, Day Pitney partner Beth Barton, President of the New England Women in Energy and the Environment (NEWIEE), will welcome attendees at NEWIEE’s second annual panel in the "New England Women Shaping the Agenda in Energy and Environment" series. This year, this event will take place at Tufts University in the ASEAN Auditorium at The Fletcher School in Medford, Massachusetts. The panel, including Maryrose Sylvester, President and CEO of Current, Powered by GE; Cheryl Warren, National Grid USA Board Director and Innovation Strategist; and Cynthia Arcate, President and CEO of PowerOptions, will discuss the business behind getting to clean energy and environment. Professor Barbara Kates-Garnick of the Fletcher School and Center for International Environment and Resource Policy will be the moderator for the panel discussion. Registration is open for the event on NEWIEE’s website.
Jed Davis was quoted in a breaking news article, "New York eases proposed cyber regulations after industry complaints," published by Reuters.
Joe Fagan was quoted in an article, "For rebuffed Jordan Cove LNG, pipeline was the stumbling block at FERC," in S&P Global Market Intelligence.
Joe Fagan was quoted in an article, "Pipeline Fights May Determine Scope Of Climate Reviews," in Law360. The article is about how an increase in legal challenges by environmental groups claiming that the Federal Energy Regulatory Commission must examine the climate change impacts of increased natural gas drilling before approving pipelines could help define the boundaries of a landmark 2004 U.S. Supreme Court ruling that limited the scope of federal environmental reviews to actions within an agency's authority.
Joe Fagan was quoted in an article, "NY Nuke Plant Subsidies Will Likely Face Legal Battle," in Law360. The article is about the challenges that nuclear plant subsidies offered by New York state in its newly announced clean energy standard will likely face due to a U.S. Supreme Court's recent decision.
Harold Blinderman was quoted in a Law360 article,"EPA's 40-Year Battle For Water Cooling Regs: A Cheat Sheet," which reviewed the status of litigation currently before the Second Circuit Court of Appeals challenging federal environmental regulations regarding the usage of cooling water by existing power plants and factories.